Rupee opens 5 paise higher against US dollar amid fall in oil prices

The rupee on Thursday opened 5 paise higher at 71.38 against the US dollar amid slide in crude oil prices and flat Asian equities. 

The domestic currency on Wednesday recovered from initial losses to settle 11 paise higher at 71.43, tracking gains in domestic equity markets and softening crude oil prices. Foreign fund inflows also supported the local currency, forex traders said.

"Strong equity markets, FII inflows, lower Brent crude prices and ICE Dollar Index helped the rupee recoup some of the losses seen on the previous day," said VK Sharma, Head - PCG & Capital Market Strategy, HDFC securities.

Market participants are expected to remain cautious today ahead of the RBI policy meeting minutes that is slated to release on Friday. 

Foreign institutional investors (FIIs) remained net buyers in the capital markets, as they infused Rs 686.33 crore on Tuesday, exchange data showed.

"Today, USD/INR pair is expected to quote in the range of 71.30 and 71.80," said Gaurang Somaiya, Research Analyst(Currency) at Motilal Oswal Financial Services (MOFSL). 

On the global front, Asian stocks barely moved on Thursday as soft US retail sales data raised fears about the health of the world’s largest economy, sucking the steam out of a five-session rally, while hopes of a Brexit deal kept sterling volatile. Chinese shares were mostly flat while Japan's Nikkei ticked up and US stock futures were barely changed. MSCI's broadest index of Asia-Pacific shares outside Japan was slightly higher with gains largely led by Hong Kong's Hang Seng index, said a Reuters report. 

In the currency market, soft US retail sales took the shine out of the dollar. The dollar index was last at 98.005, having touched its lowest since August 27 on Wednesday. Sterling traded at $1.2821, having risen to as high as $1.2877 on Wednesday, its loftiest since mid-May.

In commodities, oil prices slid after industry data showed a larger-than-expected build-up in stocks in the United States, adding to concerns that demand for oil around the world may weaken amid further signs of a global economic slowdown, the Reuters report added.