Rupee back to winning ways, up 5 paise on easing crude prices

The Indian rupee on Wednesday found its winning ways after a day's hiatus, settling five paise higher at 70.82 to the US dollar as easing crude oil prices and weaker greenback lifted sentiment in the domestic forex market.

The rupee's gains were, however, remained restricted as investors turned a bit cautious ahead of the signing of phase 1 trade agreement between the US and China.

At the interbank foreign exchange, the rupee opened on a weak note at 71.01 against the US dollar. The local unit, however, closed at 70.82 a dollar, higher by 5 paise over its previous closing.

The domestic unit on Tuesday had closed at 70.87 against the US dollar.

"The Indian rupee traded flat after opening weak against US dollar ahead of the signing of phase 1 trade agreement between US and China," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

Traders said weak domestic equities too weighed on the rupee movement.

"Rupee fell against the US dollar in the first half of the session after comments from the US treasury secretary. He mentioned that the US is likely to maintain tariffs on Chinese goods until the completion of a second phase of a US-China trade agreement," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Foreign investors bought equities worth 279.53 crore on a net basis on Wednesday, provisional exchange data showed.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.11 per cent to 97.26.

Brent crude futures, the global oil benchmark, eased 0.17 per cent to trade at USD 64.38 per barrel.

The 10-year government bond yield was at 6.63 per cent on Wednesday.

On the domestic market front, the 30-share BSE Sensex settled 79.90 points or 0.19 per cent lower at 41,872.73. Similarly, the broader Nifty closed 19 points, or 0.15 per cent, down at 12,343.30.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.9242 and for rupee/euro at 78.9892. The reference rate for rupee/British pound was fixed at 92.1390 and for rupee/100 Japanese yen at 64.43.