Indian Rupee: Weakens Amid Rising Crude Prices

The Indian rupee commenced weaker against the dollar in early trades on Wednesday, 17 July 2019 amid rising crude oil prices and foreign fund outflows. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 444.99 crore Tuesday, as per provisional data. Meanwhile weakening of the greenback vis-a-vis other currencies overseas and positive opening in domestic equities added support to the local unit and restricted the downfall.

The domestic currency opened at Rs 68.69 against the dollar and dropped further to a low of 68.83 so far during the day. In the spot currency market, the Indian unit was last seen trading at 68.80. The Indian rupee Tuesday had closed at 68.71 against the US dollar.

Domestic equity benchmarks extended early gains and hit fresh intraday high in morning trade. Firmness in banks stocks offset losses in auto shares. At 10:28 IST, the barometer index, the S&P BSE Sensex, was up 111.32 points or 0.28% at 39,242.36. The Nifty 50 index was up 33 points or 0.28% at 11,695.60.

Overseas, most Asian stocks were trading lower on Wednesday following overnight developments on the US-China trade front. U.S. stocks closed lower on Tuesday after President Donald Trump said an agreement with China on trade tariffs had a long way to go adding that America could place tariffs on an additional $ 325 billion worth of Chinese goods. Trump made his comments during a cabinet meeting at the White House. Federal Reserve chair Jerome Powell, while speaking in Paris at the Bank of France, said the economic outlook hasnt improved since the last Federal Open Markets Committee meeting in June, likely setting the stage for an interest rate cut.

Meanwhile, the U.S. dollar rose on Wednesday in Asia on the back of the release of strong retail sales data, while the pound traded near two-years low on Brexit concerns. The U.S. dollar index, which measures the greenbacks strength against a basket of six major currencies, gained 0.4% to 96.922.