Rupee opens marginally higher against US dollar amid dip in oil prices

The rupee on Friday opened 2 paise higher at 71.78 agains the US dollar amid dip in crude oil prices and rise in Asian stocks. 

The domestic unit gave up most of its losses to close down by 3 paise at 71.80 on Thursday even as uncertainty over the US-China trade talks and recession fears kept investors on edge. 

Losses in domestic equity markets and unabated foreign fund outflows hit the rupee sentiment, forex dealers said.

Foreign investors pulled out Rs 986 crore on a net basis from equities on Thursday, provisional exchange data showed.

"Rupee continues to take resistance around 72.20 zone, until it is trading below this the view will be bearish for dollar. However, further developments regarding US China trade war will keep Chinese yuan, Indian rupee and other emerging market currencies on edge," Rahul Gupta, Currency Research Head, Emkay Global Financial Services, said.

Market participants will keep an eye on GDP number for April-June quarter (Q1FY20), which is slated to be released today. A weaker-than-expected numbers could keep the rupee under pressure, according to experts. "Today, USD/INR pair is expected to quote in the range of 71.60 and 72.30," said Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL). 

On the global front, Asian shares rose in the early trade on Friday as China struck a hopeful tone on trade with the United States but continued fears about a global growth slowdown, or even a recession, capped sharp rallies. MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.6 per cent but stayed near a recent 7-1/2 month trough. Japan’s Nikkei jumped 1 per cent while South Korea’s KOSPI index gained 1.5 per cent and Australian shares rose 0.9 per cent, said a Reuters report. 

In the currency market, the dollar was a tad weaker at 98.460 against a basket of six major currencies. In commodities, US crude slipped 6 cents, or 0.1 per cent, to $56.65 a barrel while Brent was down 10 cents, or 0.2 per cent, at $60.98 a barrel, Reuters reported.