Indian Rupee: Recovers Amid Positive Local Equities

The Indian rupee recovered slightly against the dollar in early trades on Tuesday, 05 February 2019 driven by positive opening in domestic equities and greenback seen halting its recent gains in overseas markets. Investors were cautious ahead RBIs Monetary Policy Committee outcome scheduled for February 7. However, selling of the American currency by exporters supported the rupee.

The domestic currency opened strong at 71.72 at the interbank forex market then gained further ground to touch 71.67 per dollar, displaying gains of the 13 paise against the greenback. In the spot currency market, the Indian unit was last seen trading at 71.7650. On Monday, the rupee had plunged by 55 paise to close at 71.80 against the US dollar.

Domestic benchmark indices were trading almost flat in early trade. At 9:21 IST, the barometer index, the S&P BSE Sensex, was down 5.70 points or 0.02% at 36,577.04. The Nifty 50 index was almost flat at 10,911.90.

Overseas, most Asian markets remained closed for public holidays. US stocks closed higher Monday, as investors looked ahead to another week of high-profile earnings and developments in US-China trade talks. US-China trade talks will remain in focus as a March 1 deadline to avoid an increase on tariffs on Chinese imports looms. On the US data front, US factory orders fell by 0.6% in November.

Meanwhile, the dollar held on to recent gains against its major peers on Tuesday, supported by a recovery in investors risk appetite, which gave an overnight boost to U.S. yields. The dollar index, which measures the greenback against a basket of six key rivals, was barely changed at 95.846 after gaining for three straight sessions.