The Indian rupee weakened by 12 paise to 83.56 against the US dollar in early trade on Tuesday, pressured by a stronger American currency in global markets and high crude oil prices
Forex traders noted that oil importers and foreign portfolio investors (FPIs) bought US dollars amid rising US yields, dragging down the rupee.
At the interbank foreign exchange market, the rupee opened at 83.51 and slipped further to 83.56 against the dollar in initial trades, marking a 12 paise decline from its previous close.
On Monday, the rupee had depreciated by 10 paise to close at 83.44 against the US dollar. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said the rupee had seen inflows and briefly rose to 83.37 on Monday but was sold off to 83.44 due to dollar buying by oil companies and FPIs in response to rising US yields.
Bhansali predicted that the rupee might touch 83.55 before stabilizing around 83.45, with a likely trading range between 83.40 and 83.55 for the day.
Meanwhile, the dollar index, which measures the greenback’s performance against a basket of six currencies, was slightly up by 0.02% at 105.91, following a surge in US treasury yields as investors speculated on the potential impact of a second Trump presidency.
Brent crude futures, the global oil benchmark, rose by 0.22% to USD 86.80 per barrel.
In domestic equity markets, benchmark indices Sensex and Nifty hit record highs in early trade but later retreated. The Sensex was down by 64.46 points, or 0.08%, at 79,411.73 points, while the Nifty dropped by 25.55 points, or 0.11%, to 24,116.40 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, offloading shares worth Rs 426.03 crore, according to exchange data.
(With inputs from the agency)
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