Rupee opens flat at 71.55 against US dollar

The rupee on Wednesday opened flat at 71.55 against the US dollar. In the previous session, the domestic unit closed 23 paise lower at 71.57 amid fresh foreign fund inflows and gains in domestic equities.

Ahead of the important RBI policy statement, rupee is consolidating in range of 71.40 and 72.20 and most market participants are expected to remain cautious ahead of the new RBI governor’s statement, said Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services. 

RBI may consider cutting rates by 25 bais points (bps) and it will be important to watch whether the central bank changes stance to neutral from calibrated tightening.  

"Volatility for the USD/INR pair could be confined to a narrow range until the release of the policy statement. Today, USD/INR pair is expected to open at 71.75(Feb) and quote in the range of 71.40 and 72.20," Somaiya added. 

On the global front, Asian shares started cautiously on Wednesday as investors waited to see if US President Donald Trump drops any hints of progress on tariffs in his State of the Union speech. MSCI’s broadest index of Asia-Pacific shares outside Japan was flat with China and several other markets in the region still closed for the Lunar New Year holiday.

Oil prices edged higher in the early trade. US West Texas Intermediate (WTI) crude futures were at $53.76 per barrel at 2338 GMT, up 10 cents, or 0.2 per cent, from their last settlement, Reuters reported.