Indian Rupee: Appreciates Amid Dollar Weakness Overseas

The Indian rupee appreciated against the dollar in early trades on Wednesday, 13 February 2019 after retail inflation fell to a 19-month low of 2.05 per cent in January. The weakness in the dollar against some currencies overseas as investors shifted their focus to riskier asset amid the US-China trade truce hopes, also supported the rupees upmove. Besides, selling of the American currency by exporters supported the rupee.

The domestic currency opened at Rs 70.48 against the dollar and climbed to a high of 70.40 so far during the day. In the spot currency market, the Indian unit was last seen trading at 70.5375. The rupee had gained 48 paise to end at a one-month high of 70.70 against the US dollar Tuesday, registering its sixth straight session of gain. In the last six trading sessions, the rupee has gained 110 paise.

Domestic stocks edged higher in early trade boosted by improved industrial production data for December. At 9:23 IST, the barometer index, the S&P BSE Sensex, was up 177.95 points or 0.49% at 36,331.57. The Nifty 50 index was 41.30 points or 0.38% at 10,872.70.

Overseas, Asian stocks nudged higher on Wednesday, lifted by optimism that the United States and China might be able to hammer out a deal to resolve their nearly year-long trade dispute. US stock indexes closed at their highest levels for 2019 on Tuesday after lawmakers reached a tentative deal to prevent a government shutdown and as optimism grew over a potential trade deal between the U.S. and China.

The dollar edged lower versus its peers on Wednesday, as rising hopes of a breakthrough in U.S.-China trade talks led investors to put money into the euro and Asian currencies. The dollar index, a gauge of its value versus six major peers, was marginally lower at 96.65, having lost 0.35 percent on Tuesday.