Mumbai: The rupee fell by 12 paise to 83.56 against the US dollar in early trade on Tuesday, influenced by the strengthening of the US dollar in international markets and high crude oil prices.
Forex traders noted that oil importers and foreign portfolio investors (FPIs) were buying US dollars due to rising US yields, which negatively impacted the rupee.
At the interbank foreign exchange market, the rupee opened at 83.51 and declined further to 83.56 against the dollar in the initial transactions, marking a 12 paise drop from its previous close.
On Monday, the rupee had already depreciated by 10 paise, settling at 83.44 against the US dollar.
The rupee initially had dollar inflows and rose to 83.37 on Monday but later fell to 83.44 due to dollar purchases by oil importers and FPIs amidst rising US yields, according to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Bhansali predicted that the rupee might touch 83.55 on Tuesday before stabilizing around 83.45, with an expected trading range of 83.40 to 83.55 for the day.
Meanwhile, the dollar index, which measures the US dollar’s strength against a basket of six currencies, was at 105.91, up by 0.02%, following a rise in US treasury yields as investors considered a potential second Trump presidency.
Brent crude futures, the global oil benchmark, increased by 0.22% to USD 86.80 per barrel.
In the domestic equity market, benchmark indices Sensex and Nifty reached all-time highs in early trade. However, they later reversed these gains and were trading in negative territory. The BSE Sensex fell by 64.46 points, or 0.08%, to 79,411.73 points, and the broader NSE 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.
