Rupee opens 12 paise lower at 69.55 against US dollar

The rupee on Wednesday opened 12 paise lower at 69.55 against the US dollar amid weak global cues and firm oil prices. 

The domestic unit on Tuesday settled at 69.43, down 3 paise due to fag-end dollar demand from banks and importers amid sustained foreign fund outflows.

Losses in the domestic equity market and a strengthening dollar against major currencies overseas amid trade worries also weighed on the local unit, forex traders said.

Renewed tension between the US and China is keeping the volatility high for the dollar, says Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL). 

Chinese Vice Premier Liu He will travel to US for two days of trade talks this week setting up a last-ditch bid for a deal that would avoid a sharp increase in tariffs on Chinese goods ordered by US President. During a 10-month US-China trade war, US tariffs have been imposed on $250 billion worth of Chinese goods, and retaliatory Chinese tariffs slapped on $110 billion worth of American products. 

"Today, USD/INR pair is expected to quote in the range of 69.20 and 70.05-70.20," Somaiya added. 

On the global front, Asian equities slipped tracking Wall Street’s slide in the overnight trade. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 per cent, stooping to its lowest level since late March.

In the commodity market, oil prices stabilised on Wednesday as markets remained relatively tight amid US sanctions on crude exporters Iran and Venezuela.