Rupee opens flat against US dollar amid muted global cues, soft oil prices

The rupee on Tuesday opened one paisa higher at 68.65 against the US dollar amid subdued Asian equities and soft crude oil prices. 

The domestic unit on Monday declined by 24 paise to close at 68.66, cutting short its three winning run due to a massive selloff in equities and weakening expectations of a rate cut by the US Federal Reserve in near future. 

Rupee consolidated in a narrow range on Monday but came under pressure in the latter half following a meltdown in equity markets. Indian equities were weighed down following concerns that increased surcharge on super-rich could affect foreign funds investing in India. 

"On the domestic front, market participants will keep an eye on inflation as well as industrial production number. Expectation is that inflation in June could rise to 3.2 per cent compared to rise of 3.05 per cent in the previous month. Today, USD/INR pair is expected to quote in the range of 68.40 and 68.95," says Gaurang Somaiya, research analyst (Currency) at Motilal Oswal Financial Services (MOFSL).  

Foreign institutional investors pulled out Rs 401.99 crore Monday, hitting the rupee sentiment.

On the global front, Asian stocks struggled to rebound on Tuesday as investors came to terms with sharply reduced expectations the Federal Reserve will deliver a large interest rate cut at the end of July. MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.1 per cent in early trade while Japan’s Nikkei rose 0.5% thanks in part to the yen’s retreat against the dollar, Reuters reported. 

In the currency market, the dollar changed hands at 108.75 yen. 

In the commodities market, oil prices fell as trade tensions stoked economy worries. Brent crude futures were down 21 cents, or 0.3 per cent, at $63.90 a barrel in the early morning trade, said a Reuters report.