Rupee opens 16 paise higher against US dollar

The rupee on Tuesday opened 16 paise higher at 70.78 against the US dollar. The domestic unit on Monday recovered from day's low levels to close flat at 70.94 helped by foreign fund inflows into equities and lower global crude oil prices. 

According to provisional data, foreign investors pumped in Rs 2,684 crore on a net basis in capital markets on Monday. 

Investors were concerned over the renewed trade worries after the US said that it did not expect any trade deal with China before 2020, dealers said. US President Donald Trump said that he was not looking at a partial deal and was expecting a complete deal. 

"On the domestic front, market participants will now shift their focus on the RBI policy meeting that is scheduled in the first week of October. Expectation is that the central bank could consider cutting rates and what the governor’s stance will be could trigger a move for the currency,"  said Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL).

Today, USD/INR pair is expected to quote in the range of 70.70 and 71.30, Somaiya added. 

On the global front, shares ticked up on Tuesday after US Treasury Secretary Steven Mnuchin said US-China trade talks will resume next month, but lingering concerns about slowing global growth tempered the overall appetite for riskier assets.

MSCI’s broadest index of Asia-Pacific shares outside Japan moved up 0.06 per cent, supported by 0.4 per cent gains in mainland Chinese shares, while Japan’s Nikkei edged up 0.20 per cent after a market holiday on Monday. US stock futures gained 0.39 per cent, said a Reuters report. 

In commodities, Brent crude futures fell 0.42 per cent to $64.50 a barrel while US West Texas Intermediate (WTI) crude lost 0.34 per cent to $58.44 per barrel, the report added.