Rupee slips 20 paise to 69.63 against US dollar in early trade

The rupee opened 9 paise lower at 69.52 against the US dollar on Wednesday. Minutes later, the currency declined further to 69.63, down 20 paise.

On Tuesday, the domestic unit gained 34 paise to settle at 69.43 on increased selling of the greenback by exporters and smart gains in domestic equities. The currency has rallied 92 paise in the last three trading sessions. Traders said sustained selling of the American currency by exporters and banks propped up the rupee, PTI reported. 

Rupee consolidated in a narrow range for the most of the session on Tuesday but rose in the last hour of the trade. In the last couple of sessions, volatility for the USD/INR pair has dropped as most market participants were on the sidelines following New Year holidays. On the domestic front, no major economic data is expected to be released but from the US market participants will be keeping an eye on the employment and manufacturing PMI to gauge a view for the greenback. Yesterday, US volatility for major currencies was low as most global equities remain shut on account of New Year holiday, notes Gaurang Somaiya, Research Analyst(Currency) at Motilal Oswal Financial Services. 

"Today, USD/INR pair is expected to quote in the range of 69.40 and 70.05," the analyst added. 

As per provisional data, FIIs were the net sellers to the tune of Rs 48.19 crore while DIIs were the net buyers to the tune of Rs 142.58 crore in equities on Tuesday.

On the global front, Asian shares erased morning gains as disappointing economic data from China dampened the investor sentiment. MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 1.1 per cent as a private survey showed China manufacturing activity contracted for the first time in 19 months. The Shanghai blue chip index quickly shed 1 per cent and South Korea fell 0.8 per cent. Japan’s Nikkei was closed for a holiday, Reuters reported. 

Earlier, China's Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for December fell to 49.7, from 50.2 in November.