Rupee opens 5 paise higher at 69.67 against US dollar

The rupee opened 5 paise higher at 69.67 against the US dollar on Wednesday. The domestic unit on Tuesday rose marginally by 2 paise to close at 69.72 in a lacklustre trade as participants preferred to sit on the fence ahead of the results of general polls.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 1,185.44 crore on Tuesday, provisional exchange data showed.

A Bloomberg report dated May 21 said that Qi Gao, a currency strategist at Scotiabank in Singapore, expects the rupee to strengthen 67 per dollar by end-June on Narendra Modi's return to power in the Lok Sabha elections. Exit polls have predicted a clear win for NDA. Actual results will be known tomorrow (May 23).

The currency is expected to outperform Asian peers to reach its highest level in a year, the news agency reported quoting Gao, as saying.

"Today, USD/INR pair is expected to quote in the range of 69.40 and 70.05," says Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL).

On the global front, Asian stocks were under pressure in the early trade on Wednesday on US-China trade war fears. MSCI’s broadest index of Asia-Pacific shares outside Japan initially edged up following gains on Wall Street but was last down 0.15 per cent. Australian stocks slipped 0.25 per cent, South Korea’s KOSPI fell 0.45 per cent and Japan’s Nikkei edged up 0.05 per cent, Reuters reported. 

In currency market, the US dollar traded at 110.580 yen after popping up to a two-week high of 110.675. In commodities, US West Texas Intermediate (WTI) crude futures were down 0.59 per cent at $62.76 per barrel.