Rupee slips 41 paise against US dollar after Pak violates Indian air space

The rupee on Wednesday slipped as much as 41 paise in the intra-day trade after Pakistani fighter jets carried out air strikes across the Line of Control in Jammu and Kashmir's Poonch and Nowshera sectors. The Pakistani aircraft violated Indian air space and were pushed back by Indian aircraft, news agency PTI reported citing senior officials. 

At 12:34 pm, the currency was trading at 71.38. Earlier, it opened 4 paise lower at 71.11 against the greenback. On Tuesday, the domestic unit snapped its gains of previous two sessions and closed 10 paise lower at 71.07 amid fears of escalation in geopolitical tensions, following Indian fighter jets' air strikes on Pakistan-based terror camps.

Besides this, rising global crude oil prices also impacted the rupee movement.

On the domestic front, data showed India’s fiscal deficit stood at 121.5 per cent of the budgeted estimate of Rs 6.24 lakh crore for 2018-19. The gap was 112.4 per cent in December and 113.7 per cent in January 2018.  "Today, USD/INR pair is expected to quote in the range of 71.05 and 71.70," said Gaurang Somaiya Research Analyst, (Currency) at Motilal Oswal Financial Services. 

On the global front, Asian shares edged higher on Wednesday and the US dollar fell to a three-week low after Federal Reserve Chairman Jerome Powell reinforced the US central bank’s recent shift toward a more “patient” approach on policy in the face of a slowing economy, Reuters reported. 

In the commodity market, oil prices rose on OPEC-led supply cuts and a report of declining US crude inventories.