Indian rupee opens 10 paise lower against the US dollar

MUMBAI: The Indian rupee extended its weakness and opened 10 paise lower against the US dollar on Tuesday, amid lackluster domestic equities and firm greenback.

The Indian rupee opened at 73.95 against the US dollar, compared with the previous close of 73.85.

The US dollar clung to small gains on Tuesday as the greenback's safe-haven appeal was burnished by worries about a second wave of Covid-19, which drove the steepest stock market selloff in a month and underpinned a bond rally, Reuters reported.

On Monday, the Rupee fell to the lowest level in a month following broad based strength in the dollar against its major crosses. Dollar gained on the back of safe haven buying as the number of Covid cases started to increase in the US and the EU.

“On the domestic front, expectation of another stimulus package is doing round and that could also weigh on the rupee. Market participants are awaiting for more clarity on the same and that could keep the volatility in check for the currency,” Motilal Oswal analysts said in a note.

“For the day, we expect momentum for the rupee to remain low and trade with a negative bias in the range of 73.40 and 74.05,” they added.

Euro and pound both fell against the US dollar on concern over increased number of Covid cases in the Euro zone area. Yesterday, the dollar strengthened as investors cited new lockdowns in Europe and record-high daily virus cases in the United States, as well as a lack of progress towards a U.S. fiscal stimulus.