Rupee opens little changed at 83.25 against the US dollar amid drop in oil prices, US Treasury yields

The Indian rupee opened little changed against the US dollar on Wednesday amid a sharp drop in crude oil prices overnight and a decline in US Treasury yields. The local unit opened at 83.25 a dollar as compared to previous close of 83.26.

The US dollar index, which gauges the greenback’s strength against a basket of six currencies, was 0.03% higher at 105.58. The 10-year US yield was down to 4.58% after several Federal Reserve officials struck a balanced tone in their comments on inflation and the likely path of interest rates, Reuters reported.

On Tuesday, the rupee ended at 83.26 a dollar.

“We favor a sell on pull back today to 83.3 with yesterday’s upswings failing to gain momentum. Congestion point at 83.19 could pivot down moves, and momentum may not kick in until below 82.98. Alternatively outright rise above 83.4 could call for extended upsides aiming 84 initially,” said Anand James, Chief Market Strategist at Geojit Financial Services.

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Brent crude plunged more than 4% on Tuesday to its lowest in more than three months as data showed a build up in US crude supplies.

Brent crude futures, the global benchmark, gained 0.04% to $81.64 a barrel, after plummeting 4.2% in the previous session. The US West Texas Intermediate crude futures traded 0.14% lower at $77.26 a barrel. WTI crude declined 4.3% in the previous session.

Investors will now focus on the speech by US Federal Reserve Chairman Jerome Powell later in the day.

On the domestic front, the Indian equity markets traded flat on Wednesday.

The Sensex eased 3.30 points, or 0.01%, to 64,939.10, while the Nifty 50 traded 6.40 points, or 0.03%, higher at 19,413.10.

On Tuesday, the Foreign institutional investors (FIIs) net sold Indian shares worth ₹497.21 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹700.28 crore, as per provisional data available on the exchanges.

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