India's rupee has gone from being the best-performing Asian currency last quarter to the worst this year as rising crude prices and tensions over Kashmir weigh on sentiment.
While a rate cut typically lowers a currency's yield appeal, it bolsters foreign inflows into local shares, which helps strengthen the rupee
The report further noted that it would be roller coaster ride for crude oil in 2019 as Opec and Russia have resorted to a production cut; while on the other hand, US is increasing its production
The Modi government is set to present its last Budget and is expected to have major announcements
In the previous session, the currency edged higher by 4 paise to settle at 71.08 amid weakness in the greenback in overseas markets after the US Fed kept interest rate unchanged.
"Today, USD/INR pair is expected to quote in the range of 70.70 and 71.40," Gaurang Somaiya, Research Analyst (Currency) at MOFSL added.
The domestic unit weakened by 10 paise to close at 71.17 on Friday amid increasing demand for the greenback from exporters and heavy selling in domestic equities.
The domestic unit gained 26 paise to close at 71.07 as softer crude prices and gains in domestic equities bolstered forex market sentiments.
In the previous session, the domestic unit snapped its three-day losing streak and settled 11 paise higher at 71.33 on increased selling of the American currency by exporters and banks.
The domestic unit skidded by 16 paise on Tuesday to settle at 71.44 amid strengthening of the greenback and heavy selling in domestic equities.
The domestic unit Friday weakened by 16 paise to close at 71.19 against US dollar
On Thursday, the domestic unit reversed its four-day losing streak by recovering 21 paise to settle at 71.03.
In the previous session, the domestic unit declined 13 paise to close at one-month low of 71.05.
On Monday, the currency plunged by 43 paise to close at nearly one-month low of 70.92 amid weak industrial output growth data, fall in domestic equity markets and sustained foreign fund outflows.
The domestic unit Friday weakened by 8 paise to close at 70.49 on rise in demand of American currency from exporters and surge in crude oil prices.
On Thursday, the domestic currency ended 5 paise higher at 70.41 on increased selling of the greenback by exporters amid easing crude oil prices.
A rebound in prices of oil, and concerns about an expensive bailout for farmers before general elections to be held by May has caused the rupee to miss out on a revival
On Wednesday, the domestic currency slipped 25 paise to close at 70.46 as continued rise in global crude oil prices weighed on sentiments.
The rupee's path this year will largely be determined by the results of national elections in May, oil price moves and the Reserve Bank of India's policy
On Tuesday, The domestic unit plunged by 53 paise to close at 70.21 against amid renewed concerns over widening of current account deficit (CAD) following constant rise in global crude oil prices.