The Indian rupee opened little changed against the US dollar on Wednesday, aided by intervention by the Reserve Bank of India amid a strong dollar and continued overseas fund outflows from domestic stocks.
The local currency started trading at Rs 84.062, compared to the previous day's close of Rs 84.075, according to Bloomberg data. The rupee may trade in the Rs 84.00-84.20 range on Wednesday, according to Forex Analyst Kunal Sodhani of Shinhan Bank of India.
"The rupee has been consolidating in a small range for the last one week in the 84.08-84.06 level, likely aided by Reserve Bank of India intervention in the spot market to curb volatility amid a strengthening dollar and foreign equity outflows from India," Sodhani said. "It will find support at Rs 84.03 and resistance at Rs 84.12-84.15."
Echoing sentiment, Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said, "Investors have been selling yen and Indian shares and taking shelter in cash or gold ahead of US elections that could shake out global money and trade flows."
The dollar index, which tracks the greenback's relative performance against six major currencies, hovered close to a three-month peak and was at 104.15. The US 10-year bond yield slipped two basis points to 4.24%.
Mixed US indicators overnight revealed a loosening jobs market but strong consumer confidence, providing little clarity on the Federal Reserve's easing outlook. As a result, the dollar drifted lower alongside Treasury yields on Tuesday, following a robust auction of seven-year notes, Reuters reported.
Brent oil was slightly higher at $ 71.14 per barrel despite shrinking US crude inventories.
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