Rupee opens 15 paise lower amid strong dollar, higher oil prices

The domestic unit on Tuesday pared most of its initial losses and closed with a marginal 2 paise drop at 68.94 amid strengthening of the dollar against major currencies.

The rupee on Wednesday opened 15 paise lower at 69.09 against the US dollar. The domestic unit on Tuesday pared most of its initial losses and closed with a marginal 2 paise drop at 68.94 amid strengthening of the greenback against major currencies and sustained foreign fund outflows.

Rupee on Tuesday consolidated in a narrow range for the third successive session as most market participants remained cautious ahead of the important ECB (European Central Bank) policy statement that will be released today. 

Yesterday, International Monetary Fund (IMF) cut its forecast for global growth this year and next, warning that further US-China tariffs or a disorderly exit for Britain from the EU could further slow growth, weaken investment and disrupt supply chains. The IMF said downside risks had intensified and it now expected global economic growth of 3.2 per cent in 2019 and 3.5 per cent in 2020, a drop of 0.1 percentage point for both years from its April forecast, and its fourth downgrade since October. 

"Today, USD/INR pair is expected to quote in the range of 68.65 and 69.20," says Gaurang Somaiya, Research Analyst(Currency) at Motilal Oswal Financial Services (MOFSL). 

Foreign investors sold shares worth Rs 2,607.97 crore on a net basis on Tuesday, provisional data showed.

On Wednesday, Asian shares were mostly higher on the progress in the Sino-US trade talks, while the dollar hit two-month highs on the euro as investors wagered on a dovish outcome from the European Central Bank’s coming policy meeting, Reuters reported.  

In the commodities market, oil prices edged higher, extending gains as rising tensions with Iran fueled concerns about supply disruptions and as US inventory data showed a much bigger than expected drop in crude stockpiles, the report added.