Rupee opens higher against dollar at 55.69 .

The Indian rupee continued to recover on Wednesday against the dollar after three sessions of falls. It opened higher at 55.69 to the dollar, 0.2 per cent higher than Tuesday’s close.

At 9.04 a.m., the currency was trading at 55.78/80, slightly stronger than its close on Tuesday.

The rupee had breached the key psychological 56-level against the US dollar to hit a one week low of 56.07 on Tuesday. However, it recovered to close at 55.80 per dollar, 0.11 per cent lower than Monday's close.

Asian shares rose on Wednesday, following gains in European and U.S. markets where bargain hunters bought beaten down stocks, but markets remained vulnerable to the euro zone's debt woes as Spanish yields hit record highs on worries over banks. Japan's Nikkei share average edged up on Wednesday morning, supported by solid gains for large caps, yet the broader Topix toyed with negative.

In domestic sphere, India’s industrial production almost halted in April as data showed a flat growth of 0.1 per cent. Credit-rating agency S&P too warned that the country might become the first BRIC nation to lose its investment-grade rating on political roadblock to economic policymaking.

However, this has raise expectations that the Reserve Bank of India will cut interest rates on 18 June, which are helping spark some hope for the faltering domestic economy, though the rupee will likely remain beholden to global risk factors in the near-term.

The rupee has recovered since hitting a string of record lows last month, with the latest hit on 31 May when it dropped to 56.52 to the dollar, marking what so far has been a near-term bottom for the local currency.

Source : profit.ndtv.com