Rupee opens 8 paise lower against US dollar amid drop in oil prices

The rupee on Friday opened 8 paise lower at 70.96 against the US dollar amid weak Asian equities and drop in crude oil prices. The domestic unit on Thursday strengthened by 16 paise to close at 70.88 as investor sentiment got a lift after US President Donald Trump said a trade deal with China could happen sooner than expected. 

Robust buying in domestic equities, fresh foreign fund inflows and easing crude oil prices also lent support to the domestic unit, forex traders said.

"In the last few sessions the rupee is consolidating in a narrow range of 70.70 and 71.25(Spot) despite volatility in global markets. Post the announcement by the Finance Minister to cut tax rates domestic equities have been rallying together marginal gains in the rupee. But ahead of the RBI policy meeting scheduled next week market participants are a little cautious. On the domestic front, FIIs have been sidelines post the announcement by the Finance Minister but further inflows could keep the rupee supported against the US dollar," 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. 

Foreign institutional investors (FIIs), who were net sellers for the last few sessions, bought equities worth a net Rs 737.17 crore on Thursday, according to provisional exchange data. 

On the global front, Asian shares were on course for a second straight week of losses on Friday as the release of a whistleblower complaint against US President Donald Trump heightened uncertainties about the global economy, already reeling from Sino-US trade war. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.09 per cent, having fallen 1.4 per cent so far this week, while Japan's Nikkei slid 0.54 per cent. US S&P500 futures lost 0.08 per cent in early Asian trading after the index lost 0.24 per cent on Thursday, said a Reuters report. 

In commodities, oil prices fell on Friday. Brent crude futures fell 32 cents, or 0.5 per cent, from the previous session’s close to $62.42 a barrel while US West Texas Intermediate (WTI) crude futures fell 8 cents, or 0.1 per cent, to $56.33 a barrel, the report added.