Rupee opens 12 paise higher against US dollar amid drop in oil prices

The rupee on Thursday opened 12 paise higher at 70.95 against the US dollar amid recovery in global equities and a drop in crude oil prices. The domestic unit on Wednesday pared most of its initial losses and settled the day marginally down by 5 paise to 71.07 as China offering to buy additional US goods to ease trade tensions bolstered hopes of a partial deal between the two major economies. 

Forex traders said market participants are hopeful about the US-China trade meeting on October 10.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 485.24 crore on Wednesday, exchange data showed. 

"Today, USD/INR pair is expected to quote in the range of 71.05 and 71.70," said Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL). 

On the global front, stocks recouped early losses as news reports raised hopes that the United States and China would settle some economic disputes, but investors were kept on edge by an earlier report that trade talks due to begin on Thursday could be cut short. US S&P500 mini futures traded down 0.2 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan were flat while Japan's Nikkei gained 0.3 per cent. Shanghai shares also rose 0.35 per cent, Reuters reported.

Oil prices slid in the early trade. Global benchmark Brent crude futures fell 26 cents, or 0.5 per cent, to $58.05 a barrel by 7:03 am, while US West Texas Intermediate crude was at $52.38 per barrel, down 21 cents, a 0.4 per cent drop, the report added.