Rupee opens 5 paise higher at 71.29 against US dollar as oil prices slip

Rupee on Wednesday opened 5 paise higher at 71.29 against the US dollar amid drop in crude oil prices. The domestic unit weakened by 11 paise to end at 71.34 against the greenback on Monday, amid firming crude oil prices and persistent foreign fund outflows.

Money market was closed on Tuesday on the account of Chhatrapati Shivaji Jayanti.

Rupee on Monday came under pressure against the US dollar after trade deficit for January widened compared to the previous month. In January, merchandise exports rose 3.7 per cent from a year earlier to $26.36 billion, while imports were up 0.01 per cent to $41.09 billion. "Today, USD/INR pair is expected to quote in the range of 71.20 and 71.70," said Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services.

In the equity market, foreign investors (FIIs) pulled out a total of Rs 813.76 crore from the market on Tuesday while domestic investors (DIIs) infused a total of Rs 1,163.85 crore, NSE data showed. 

On the global front, Asian stocks were slightly up Wednesday after US-China trade talks resumed while investors awaited minutes from the US Federal Reserve for clues on policymakers’ thinking on interest rates and its balance sheet reduction policy.

In the commodity market, oil prices slipped from 2019 highs as soaring US production undermined efforts led by producer club OPEC to cut supply to tighten global markets, Reuters reported.