Rupee declines against US dollar

The Indian rupee declined against the US dollar on Tuesday due to a rise in crude oil prices and forex outflows. Besides, early gains in domestic equity markets and a weak dollar against world currencies, however, restricted the rupee’s losses.

The currency opened lower at 81.48 to a dollar against the last close of 81.42. It moved in a range of 81.48 to 81.68 in morning deals. At the interbank foreign exchange, the rupee was trading at 81.68/$. 

Meanwhile, the US dollar index, which shows the strength of the greenback against six world currencies, was down 0.17 per cent at 101.96. The yen strengthened another 0.6% to 129.81 as speculation on a tighter BoJ policy built. Kuroda is due to step down from his position in March, and most analysts expect the new Governor to take a different approach.

In Europe, the pound also rose after new data showed a surge in government borrowing in December, reflecting the rising cost of keeping energy bills for households and businesses capped. 

The pound was up 0.3% to $1.2406 as traders bet on the Bank of England having to keep up its current pace of interest rate hikes in order to bring inflation down.