Rupee slips 14 paise against US dollar at open amid rebound in oil prices

The rupee on Thursday opened 15 paise lower at 71.22 against the US dollar amid rebound in crude oil prices and concerns over economic growth. The domestic unit on Tuesday dropped 20 paise to close at 71.07 as heavy selling in domestic equities, unabated foreign fund outflows kept investors edgy.

According to forex traders, market sentiment remained fragile ahead of US-China trade meet on October 10. Besides, rising crude oil prices also put pressure on the domestic unit.

"Rupee on Tuesday came under pressure primarily on back of strength in the dollar against its major crosses and after the government released its borrowing plan for the fiscal," said Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL). 

The finance ministry said that it will borrow Rs 2.68 lakh crore in the second half of the fiscal, having borrowed Rs 4.42 crore in the first half, of the total planned Rs 7.1 lakh crore for FY20. 

This has raised prospects that the government would not be able to meet its fiscal deficit target and that is putting the currency under pressure against the US dollar. Today, USD/INR pair is expected to quote in the range of 70.70 and 71.50, Somaiya added. 

Foreign institutional investors (FIIs) offloaded shares worth a net Rs 1,298.56 crore on Tuesday, according to provisional exchange data. 

On the global front, Asian stocks skidded to a one-month low on Thursday after the United States opened a new front in its trade dispute with Europe by imposing tariffs, adding to already-growing market fears about global growth. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.78 per cent, Japan's Nikkei stock index fell 2.20 per cent, on course for its biggest daily decline in six months, Reuters reported. 

US stock futures ESc1 were up 0.25 per cent. 

In commodities, oil futures rebounded in the early trade after declining 2 per cent in the previous session, the report added.