Rupee opens 7 paisa lower at 90.72 against the dollar

Indian Rupee

The rupee opened 7 paisa down against the dollar on February 17, weighed down by widening trade deficit, weak Asian cues and heavy dollar demand. Market participants remained on the sidelines, as the currency struggled to break the 90-mark for lack of global cues.

The rupee opened at 90.72 after ending the previous session at 90.

The rupee has been caught in 20 paise range for the last few days, with importers buying the dollar heavily to hedge positions. The Reserve Bank of India has also intervened in both the spot and the offshore non-deliverable forwards market.

“Earlier, USD/INR had established a base in the Rs 90–90.20 zone. That base has now shifted higher toward 90.40, indicating a gradual upward realignment in the pair. A decisive break above 90.80 could trigger an immediate 40-paisa extension,” Amit Pabari, MD at CR Forex Advisors said.

The country’s merchandise deficit for January widened to $34.68 billion, above market expectations. A higher deficit usually weighs on the local currency, as more dollar-denominated imports are required.

The dollar held on to marginal gains after a softer US inflation print last week showed that more rate cuts could be on the cards. The dollar index, which measures the strength of the greenback against six major currencies, was at 97.12. It ended the previous session at 96.97.