The Indian Rupee opened marginally higher on Tuesday morning after it opened lower for six consecutive days. The rupee has been under pressure to escalating trade tensions between two economic giants US and China. Yesterday, China hit back at US and said it would impose tariffs on range of US goods of $60 from June 1.
Today, the rupee opened in green amid heavy sell-off in US equities.Yesterday, the Rupee settled at its more than two and a half month low at 70.52 against the US dollar, down by 59 paise over its last close. It had opened lower at 70.16 on Monday morning.
“Spot INR likely to trade in a relatively higher range between 70.20-70.65 with an upward bias as the trade war scenario has worsened after China imposed tariffs on $60 bn of US goods,” Amit Sajeja, Associate Vice President, Motilal Oswal, told Financial Express Online.
The foreign fund outflows and rising crude oil prices have also put pressure on the Indian currency. Yesterday the foreign institutional investors sold shares of Rs 1,056 crore on a net basis. After the Saudi Arabia claimed that its four oil vessels were destroyed in an attack on Sunday, the US WTI oil rose very sharply in initial trades due to fear of rise in geopolitical risk. But as US session began, the escalating US -China trade worries raised concerns for demand and oil nose-dived, erasing all early gains.
“The rupee fell yesterday due to trade concerns between the U.S. and China. Moreover, consistent sell-off in the domestic equities weighed on the rupee. Today the rupee may appreciate due to sell-off in the international crude oil prices but, at the same time weakness in the global equities will put pressure on the domestic currency. Further, India’s CPI jumped to 6-month high of 2.92% in April this could keep sentiments bearish. Today the government will release WPI inflation data. Range for today would be 70.10 to 70.70,” Jigar Trivedi, Fundamental Analyst – Commodities at Anand Rathi Shares & Stock Brokers told Financial Express Online.
Source: financialexpress.com