Rupee drops 24 paise to 94.25 against US dollar in early trade

Mumbai: The rupee stayed on a downward track for the fifth straight day, losing 24 paise to 94.25 against the US dollar in early trade on Friday, weighed by volatile crude oil prices and an elevated US dollar, with prospects of West Asia peace talks turning hazier.

Analysts said that despite a ceasefire in place between the United States and Iran, ship movement through the Strait of Hormuz remained uncertain after the US military on Thursday seized another Iranian oil tanker, intensifying the standoff and unsettling the fuel prices worldwide.

President Donald Trump has also ordered the US military to "shoot and kill" small Iranian boats that deploy mines to choke traffic through the Strait of Hormuz.

Unabated withdrawal of foreign funds from domestic stock markets also added to investors' worries, triggering a massive sell-off in equities and further dragging down the local currency, forex traders said.

At the interbank foreign exchange market, the rupee opened at 94.25 and stayed at the same level in early deals, registering a loss of 24 paise from the previous closing level.

Extended its losing streak for the fourth consecutive session on Thursday, the rupee settled 23 paise lower at 94.01.

In the past four sessions, the domestic unit has lost nearly 1.4 per cent, since the closing level of 92.91 recorded on April 17.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.12 per cent higher at 98.71.

Brent crude, the global oil benchmark, was trading 0.86 per cent higher at USD 105.97 per barrel in futures trade.

In the domestic equity markets the 30-share Sensex was trading 547.02 points or 0.70 per cent down at 77,116.98 in early trade, while the Nifty lost 159.75 points or 0.66 per cent to 24,013.30.

Foreign Institutional Investors offloaded equities worth about 3,254.71 crore on Thursday, according to the exchange data.