Rupee Slips 9 Paise To 71.03 Against USD In Early Trade

The rupee opened marginally lower by 9 paise to 71.03 against the US dollar in opening trade on Monday, as rising crude oil prices and concerns regarding US-China trade war kept investors edgy. Forex traders said reports that the US is likely to ramp up pressure on China by raising existing tariffs if a trade deal is not reached soon between the two countries, weighed on the domestic currency.

Michael Pillsbury, adviser to the White House on China policy, said that Trump would likely escalate the trade war by raising existing tariffs, if no deal is reached. In an interview in Hong Kong on Thursday, Pillsbury said that Trump had been remarkably restrained in the pressure he has brought to bear on China in the trade field.

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At the interbank forex market the rupee opened weak at 71.03, down 9 paise over its last close. The rupee had settled at 70.94 against the US dollar on Friday. The local unit however pared the initial loss and was trading flat at 70.94 against the US dollar at 1012 hours. Brent crude futures, the global oil benchmark, rose 1.04 per cent to USD 64.95 per barrel.

Meanwhile, foreign fund inflows, weakening of the American currency vis-a-vis other currencies overseas and higher opening in domestic equity market supported the domestic currency.

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The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.04 per cent to 98.47. Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 35.78 crore on Friday, as per provisional data.

Domestic bourses opened on a bullish note on Monday with benchmark indices Sensex trading 774.19 points higher at 38,788.81 and Nifty up by 245.45 points at 11,519.65. The 10-year government bond yield was at 6.77 per cent in morning trade.