The rupee on Tuesday opened 3 paise higher at 69.37 against the US dollar amid decline in crude oil prices. The domestic unit on Monday fell by 18 paise to close at 69.40, as renewed trade war worries following the US President Donald Trump's threat to raise tariffs on Chinese imports spooked investors and triggered flight of capital to safe bets.
Foreign investors were net sellers in capital markets Monday selling assets worth Rs 948 crore on a net basis, provisional exchange data showed.
There is an expectation that the Chinese representatives may backtrack on substantial commitments it made during trade talks with the US, prompting US President Donald Trump to impose additional tariffs on Chinese goods slated to go into effect as early as Friday. China has repeatedly said it will make changes to open its economy according to its own timeline, not in response to trade disputes, news reports say.
"Today, USD/INR pair is expected to quote in the range of 69.20 and 70.05-70.20," says Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL).
On the global front, Asian shares wallowed near five-week lows in the early trade on Tuesday. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped as much as 0.2 per cent to five-week low marked on Monday. US stock futures for the S&P 500 declined as much as 0.7 per cent in Asia as top US trade officials said China had backtracked on commitments in trade talks.
In the commodity market, oil futures edged lower. US crude fell 0.2 per cent to $62.12 per and Brent crude was 0.3 per cent lower at $71.00 per barrel on early Tuesday, Reuters reported.