The Indian rupee opened on a weak note and fell 12 paise to 71.78 against the U.S. dollar in early trade on Wednesday, amid weak opening in domestic equities and sustained foreign fund outflows.
Forex traders said, the domestic unit is trading in a narrow range ahead of the RBI monetary policy decision on Thursday.
At the interbank foreign exchange, the rupee opened weak at 71.76 then fell to 71.78 against the U.S. dollar, showing a decline of 12 paise over its previous closing.
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The Indian rupee on Tuesday had closed at 71.66 against the U.S. dollar.
Bankers and experts believe the Reserve Bank may cut interest rates for the sixth straight time on December 5, to support growth that has continued to slip.
Traders said rupee is trading in a narrow range as market is awaiting fresh cues on the potential U.S.-China trade deal.
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U.S. President Donald Trump has announced imposition of tariffs on imports from Brazil and Argentina as well as indicated that a deal with China might not be happening till next year’s U.S. presidential polls.
Speaking in London where he is attending a NATO summit, Mr. Trump said on Tuesday, “I have no deadline, no.”
In some ways I like the idea of waiting until after the election,” Mr. Trump added.
Meanwhile, brent crude futures, the global oil benchmark, rose 0.81$ to $61.31 per barrel.
Foreign institutional investors remained net sellers in the capital markets, as they sold shares worth ₹1,131.12 crore on Tuesday, as per provisional data.
Domestic bourses opened on a cautious note on Wednesday with benchmark indices Sensex trading 62.79 points down at 40,612.66 and Nifty down 25.65 points to 11,968.55.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.01% to 97.72.
The 10-year government bond yield was at 6.46% in morning trade.