The Indian rupee opened higher at 68.85 per dollar on Wednesday versus previous close 68.93.

On July 2 the rupee ended flat at 68.93 against the US dollar in a lacklustre trade as participants preferred to sit on the fence ahead of the Union Budget due on July 5.

Rupee remained little unchanged against the dollar as a fall in crude oil prices helped to offset the strength in dollar. Currently, the trade tensions, global slowdown and banking stress in India will keep check on rupee appreciation. Dollar index rose by the most in over three months after better-than-expected U.S. manufacturing data. The ISM said its index of U.S. factory activity was at 51.7 last month, better than the expected by markets. Sentiment was impacted after the U.S. government threatened tariffs on $4 billion of additional EU goods, in a dispute over aircraft

subsidies yesterday. The development comes after the U.S. and China’s temporary trade truce at the G-20 last week, said Motilal Oswal.

Dollar even got supported after chances of a 50-basis-points rate cut at July Federal Reserve meeting fell to 20% from 40% a week ago, after the G-20 meeting. Meanwhile, after the G20 meeting most Asian currencies including the Yuan are trading on a positive note. Donald Trump and Xi Jinping’s meeting over the weekend, at which the leaders of the two largest economies agreed to resume negotiations. Today, USD-INR pair is expected to quote in the range of 69.905 and 68.80.

Euro and pound were weighed down against the US dollar despite better-than-expected manufacturing PMI number. Today, markets watch out for data on PMI numbers from EU, UK and U.S and that could keep the volatility high for the greenback, it added.

Published On : 03-07-2019

Source : Money Control