The rupee opened weaker against the greenback on Wednesday as the dollar index rebounded in early trade. The rupee opened 7 paise weaker at 86.64 against the greenback.
The domestic currency is likely to trade in the range of 86.45–86.70, with appreciation bias, according to Abhishek Goenka, founder and chief executive officer, India Forex & Asset Managment Pvt.
The dollar index declined on Tuesday's session as the euro rose after German parliament approved huge spending fund plans, marking the end of decades of fiscal conservatism, Reuters reported. The index declined 0.17% to 103.20.
In early Asian trade, the dollar index erased losses. It rose 0.11% to 103.36. As of 8:55 a.m., the index was trading 0.1% higher at 103.35.
The moves in the global currency markets is expected to be dull as investors await the outcomes of the Federal Open Market Committee's March policy meet. The rate-setting panel is expected to maintain status quo, however, their economic projection and Chair Jerome Powell's speech will be crucial.
Meanwhile, crude oil prices declined after American Petroleum Institute said nationwide inventories rose by 4.6 million barrels in the week ended March 14. The crude oil was trading 0.30% down at $70.35 a barrel as of 8:56 a.m. The prices rose as much as 1.58% to $72.19 a barrel on Tuesday.
The domestic unit settled 23 paise higher at 86.57 against the US dollar, marking the highest close since Feb 21. "There were no particular flows but most foreign banks were selling (dollars) and the Reserve Bank of India was conspicuous by its absence, which had bought dollars yesterday at 86.80. The range for today is expected between 86.40 to 86.90, with a sell on the good upticks call," said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.
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