Rupee Opens Weaker Against US Dollar

The Indian Rupee weakened by 15 paise to open at Rs 85.85 against the greenback, according to Bloomberg. It had closed at Rs 85.70 on Tuesday.

This comes after Trump announced that Wednesday morning will bring announcements for seven countries having to deal with trade tariffs. US and Japan have failed to announce a deal despite multiple rounds of meetings. Meanwhile an India and US deal which was to be announced overnight is still not on the boards, though Trump said it is almost finalised and would be announced soon.

"The rupee gained on expectations of an announcement of the US-India mini trade deal but none came through overnight. According the opening, this morning is at 85.73 within a range of 85.50 to 86.00, with rupee in a consolidation mode," according to Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP.

He also recommends that the Dollar can be sold off near 86.00 levels, while it can be bought at below 85.50 levels if the India-US deal is finalised.

Bhansali expects the rupee to trade in the Rs 85.50 to 86.00 range on Wednesday, with exporters on the watchful side for hedging. Exporters are advised to sit tight hedge near 86.00 and importers can hedge for near term at 85.30 and below.

The Brent oil prices reached a two-week high at $70.15 per barrel driven by supply concerns from fresh Houthi attacks on Red Sea shipping lanes. However, the prices fell slightly to $70 as the American Petroleum Institute reported an unexpected rise in crude oil inventories with a build up of 7.1 million barrels, according to Bhansali. The data indicated a weakening demand and potential oversupply challenges in the US market.