The Indian rupee and bond prices fell on Wednesday as the market worried that a rise in global oil prices will stoke domestic inflation. Traders, meanwhile, exercised caution, rattled by renewed trade war concern following US President Donald Trump’s threats to Beijing amid tariff negotiations and ahead of the Federal Reserve’s long-awaited rate cut in a decade.
Having opened at 68.90 a dollar, the Indian unit, in early deals, was traded at 68.90, down 0.08% from its previous close of 68.86.
The yield on the 10-year government bond was at 6.404% compared with Tuesday's close of 6.39%. Bond prices and yields move in opposite directions.
Global crude oil prices have risen in eight of nine trading sessions, gaining 5.2% during the period. In July, prices declined 2.1%.
Later in the day, the US Federal Reserve is widely expected to cut interest rates for the first time since the financial crisis more than a decade ago.
Back home, in pre-trade, benchmark equity index Sensex was down 0.2% at 37315.53 points. So far this year, the index has risen 3.7%.
The rupee has risen 1.3% against the greenback in the year so far. Foreign investors bought $9.72 billion in Indian equities and $2.49 billion in the debt market during the period.
Other Asian currencies traded in a narrow range in morning trade. Malaysian ringgit was down 0.05%, Taiwan dollar 0.05%, China Offshore 0.03%. However, Philippines peso was up 0.06%, Singapore dollar 0.05%, Japanese yen 0.04%.
The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.061, up 0.02% from its previous close of 98.05.