Rupee recovers, opens 24 paise higher against US dollar

The rupee opened 24 paise higher at 69.96 against the US dollar on Friday amid mixed Asian cues and decline in crude oil prices. 

The domestic unit weakened for the second straight session Thursday, slipping by 2 paise to 70.20 against on robust foreign fund outflows amid rising trade deficit worries.

On Thursday, volatility in rupee continued to remain high but traded in a wide range of 70.05 and 70.40 (spot) for the second successive session. Global crude oil prices are inching higher in the past few sessions on signs of output cuts by Saudi Arabia. In the last few sessions crude has been volatile by concerns that slowing global economic growth could dent demand but has drawn support from signs that Saudi Arabia is cutting crude output, said Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services. 

"Today, USD/INR pair is expected to quote in the range of 70.05 and 70.50," the analyst added. 

On Thursday, foreign investors (FIIs) were the net sellers to the tune of Rs 972.81 crore in the capital markets while domestic investors (DIIs) emerged as the net buyers to the tune of Rs 34.52 crore, NSE data showed. 

Source: NSE

On the global front, oil prices dropped in the early trdae after the United States followed most other major economies into a manufacturing downturn, although supply cuts by producer club OPEC kept declines in check. International Brent crude futures were down 21 cents, or 0.4 per cent, at 08:28 am at $55.74 a barrel. US West Texas Intermediate (WTI) crude oil futures CLc1 were at $47.05 per barrel, down 4 cents, or 0.1 per cent, Reuters reported.

In the equity market, most Asian shares traded lower. Japanese shares skidded on their first trading day of the year on Friday, with the Nikkei spiraling about 3.6 per cent lower on growth worries and a sharp jump in the yen. MSCI’s index of Asia-Pacific shares outside Japan dipped 0.1 per cent lower to near two-month lows, weighed by a drop of about 1 per cent in Australian shares, said a Reuters report.