Opening Note :
Indian rupee is getting hit amid sentiment soured in US - China trade negotiations. *As we mentioned earlier, the partial deal is lacking with a clear substance of conviction and highly misguided*. Yesterday rupee ended the lowest level in three weeks after Bloomberg reported that China wants more talks before signing the deal.The deterioration in rupee scaled-up further after *RBI strong intervention around 70.80 levels along with dollar buying from Oil Marketing Companies*, not letting the domestic unit to rise beyond.
Further sentiment was hit after Industrial Production contracted to 1.1 percent in August ( released last Friday ). Aditionally headline CPI zoomed to 3.99 percent in September versus 3.28 percent in August. Although domestic headline inflation printed the highest in 14 months which may not prevent RBI to ease the policy rate further.
For the day, rupee will take further cues from the development of trade talks between US-China which is the only parameter to judge the direction in USDINR for the time being.