Rupee opens 7 paise higher at 82.23 against US dollar

The US dollar remained under pressure, weighed down by the risk of a US default as a standoff between Democrats and Republicans over raising the debt ceiling showed few signs of being resolved, Reuters reported.

The US dollar index, which measures the currency against a basket of six major peers, was little changed at 102.46, after sliding 0.26% overnight and retreating from a five-month high.

On Monday, the rupee closed 15 paise lower at 82.30 against the US dollar, weighed down by the strength of the American currency in the overseas market.

The euro, which has the greatest weight in the dollar index, was little changed at $1.0873 on Tuesday, after bouncing off a five-week low overnight. Sterling slipped 0.1% to $1.2520, following a 0.67% rally from Monday. The yen, which had been hit by the wider spread between US and Japanese long-term yields, pulled itself off a nearly two-week low.

Meanwhile, Asian markets trimmed gains after data from China showed that consumer spending and industrial activity both grew at a slower pace in April than expected. The offshore yuan weakened.

Crude oil prices, on the other hand, rose in the early trade with the benchmark Brent oil rising 0.43% to $75.55 per barrel and the WTI crude oil prices gaining 0.43% to $71.41 a barrel.

On the domestic front, India’s merchandise trade deficit declined to $15.2 billion in April from $19.7 billion in the previous month. The merchandise and services deficit fell to a 21-month low of $1.38 billion.

The Indian equity markets rallied Monday with the benchmark indices Sensex and Nifty ending at 5-month high levels and Bank Nifty posting record close as investors’ sentiment improved amid cooling domestic wholesale and retail inflation coupled with sustained foreign capital inflows.

The BSE Sensex rallied 317.81 points, or 0.51%, to close at 62,345.71, while the NSE Nifty50 ended 84.05 points, or 0.46%, higher at 18,398.85.

The Foreign Institutional Investors (FII) net bought Indian shares worth ₹1,685.29 crore, while Domestic Institutional Investors (DII) net bought shares worth ₹191.20 crore on Monday.

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