Indian Rupee: Edges Lower In Cautious Trades Ahead Of RBI Policy

The Indian rupee dropped lower against the dollar in early trades on Thursday, 07 February 2019 ahead of the Reserve Bank of Indias interest rate decision. The domestic currency has been trading in a narrow range in the last two trading sessions as investors were cautious ahead RBIs Monetary Policy Committee outcome scheduled to be announced later in the day. Positive opening in domestic equities, fresh foreign fund inflows and easing crude prices, however, capped the losses for the domestic unit.

The domestic currency opened at Rs 71.73 against the dollar and registered an intra-day high and low of 71.5950 and 71.76 so far during the day. In the spot currency market, the Indian unit was last seen trading at 71.62. On Wednesday, the rupee had settled 1 paise higher at 71.56 against the US dollar.

Domestic benchmark indices were trading higher in early trade. At 9:20 IST, the barometer index, the S&P BSE Sensex, was up 125.11 points or 0.34% at 37,100.34. The Nifty 50 index was up 128.10 points or 1.17% at 11,062.45. The Sensex crossed the 37,000 mark. Investors are awaiting the outcome of a three-day central bank policy meeting that ends later today. The resolution of the Reserve Bank of India (RBI)s Monetary Policy Committee (MPC) will be placed on the RBI website at 11:45 IST.

Overseas, stocks in Asia traded mixed on Thursday, while US-China trade hopes are up as negotiations are set to continue. US stocks closed lower Wednesday, with the S&P 500 snapping a five-day winning streak, after President Donald Trumps State of the Union address offered few details on his economic agenda. The president, however, insisted China commit to real, structural economic reforms before a trade deal can be reached.

Meanwhile, the dollar index, a gauge of its value versus six major peers was steady at 96.35, hovering close to its two-week high in early Asian trade. The dollar index has gained for three consecutive sessions, mainly thanks to a weaker euro, which constitutes around 58 percent of the index.