Rupee fell by 9 paise to 70.55 against the US dollar in early trade today, reported. Losses in the domestic currency came amid rising crude oil prices and strengthening of the US dollar.
Trading in the rupee was cautious amid the ongoing two-day meeting of the fifth bi-monthly monetary policy decision of the Reserve Bank of India (RBI). On Monday, the rupee had settled 88 paise lower at 70.46 against the dollar to register its biggest single-day loss in more than three months.
Know about rupee-dollar rate on Tuesday:
1) The rupee opened lower at 70.50 a dollar and dropped further to quote at 70.55, 9 paise down over its previous close.
2) Fresh demand for the American currency from importers amid rise in crude prices weighed on the domestic unit, forex dealers were quoted as saying in a report.
3) The dollar index, which tracks the greenback against a basket of peers, softened 0.3 per cent to 96.718. The dollar was 0.5 per cent weaker against the yen, at 113.047, and the euro gained 0.3 per cent to $1.1384, reported.
4) Oil prices rose, extending strong gains from the previous day amid the expected Organization of the Petroleum Exporting Countries (OPEC)-led supply cuts and a mandated reduction in Canadian output. US crude was 1 per cent higher at $53.46 per barrel, and Brent crude futures gained 0.9 per cent to $62.26 a barrel, reported .
5) West Asia-dominated OPEC will, on December 6, meet at its headquarters in Vienna, Austria, to agree a joint output policy. OPEC will also discuss policy with non-OPEC production giant Russia.
6) However, declines in the rupee were restricted amid fresh foreign inflows, traders said. Foreign portfolio investors bought shares worth Rs. 293.12 crore on Monday, according to provisional data from the National Stock Exchange.
7) IFA Global said that some further dollar-rupee short covering may be seen ahead of major domestic events.
8) The outcome of the two-day meeting of the RBI will be revealed on Wednesday. A poll of 70 economists predicted the RBI would hold its repo rate at 6.50 per cent.
9) Meanwhile, the key benchmarks of stock market Sensex and Nifty traded in the red. At 1:28 pm, the 30-share Sensex was at 36,072.67, down 168.33 points or 0.46 per cent and the 50-scrip Nifty was at 10,850.30, with a loss of 33.45 points or 0.31 per cent.
10) IT stocks, which usually gain amid a fall the rupee, were the biggest sectoral gainers. Nifty IT- the index of information technology shares – gained 1.59 per cent.>