Rupee falls 7 paise to 83.38 against US dollar in early trade

Mumbai: The rupee depreciated 7 paise to 83.38 against the US dollar in early trade on Friday, weighed down by a negative trend in domestic equities and elevated crude oil prices.

Forex traders said the strength of the American currency in the overseas market also dented investor sentiments.

At the interbank foreign exchange, the rupee opened at 83.36 against the dollar and touched a low of 83.38 in the initial trade, registering a fall of 7 paise over its previous close.

On Wednesday, the rupee closed flat at 83.31 against the US dollar.

Stock, money, commodity, and derivative markets were closed on Thursday on account of Eid-Ul-Fitr.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 105.35, higher by 0.07 per cent.

Brent crude futures, the global oil benchmark, rose 0.58 per cent to USD 90.26 per barrel.

"Brent oil continued to remain in the higher side of the curve on Middle East jitters as Iran promised to retaliate for a suspected air strike on its embassy in Syria which could risk disruptions of shipments from the Region," said Anil Kumar Bhansali Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Bhansali further noted that the rupee which fell to 83.40 in the Non-deliverable Forwards (NDF) market on Wednesday evening recovered to an opening of 83.32 on Friday morning. "As RBI may protect it from depreciation beyond 83.40 exporters may sell at this level for all near term exports," he said.

On the domestic equity market, the 30-share BSE Sensex was trading 374.49 points, or 0.50 per cent lower at 74,663.66 points. The broader NSE Nifty was down 123.90 points, or 0.54 per cent, to 22,629.90 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they purchased shares worth Rs 2,778.17 crore, according to exchange data.