Rupee opens 35 paise lower against US dollar

The rupee opened 35 paise lower against the US dollar on Monday amid mixed Asian cues. 

The domestic unit on Friday weakened by 17 paise to close at 71.25 as concerns related to fiscal slippage weighed on the sentiment after the Interim Budget unveiled some big populist measures ahead of the general elections. On a weekly-basis, the domestic currency registered a loss of 8 paise. It had registered a marginal gain of 2 paise in the previous week, said a PTI report. 

In the Budget, the finance minister has upwardly revised the country’s fiscal deficit targets by 10 basis points for 2018-19 and 30 basis points in 2019-20 because of higher expenditure on an income support scheme. The fiscal deficit for the current financial year is likely to be around 3.4 per cent of GDP, marginally higher than the targeted 3.3 per cent. 

Today, USD/INR pair is expected to quote in the range of 71.40 and 72.20, said Gaurang Somaiya, Research Analyst(Currency) at Motilal Oswal Financial Services. 

Data show overseas investors pulled out Rs 5,300 crore from the Indian capital markets in January, indicating their 'wait and watch' approach ahead of the general elections.

On the global front, Asia stocks traded flat in the early trade on Monday, staying near a four-month high after Wall Street’s tepid pre-weekend performance, while the dollar was supported against the yen following strong US jobs and manufacturing data. 

In the commodities market, crude oil prices slipped. US West Texas Intermediate (WTI) futures were at $55.06 per barrel at 0122 GMT, down 20 cents, or 0.36 per cent, from their last settlement. International Brent crude oil futures were down 24 cents, at $62.51 a barrel, after closing up 3.14 per cent in the previous session at their highest since November 21, Reuters reported.

The dollar held near a one-week high against the yen while the dollar index, a gauge of its value versus six major peers, was steady at 95.60.