Rupee fell 7 paise to 84.47 against US dollar in early trade

Mumbai: The rupee fell 7 paise to trade at 84.47 against the US dollar in early trade on Thursday weighed down by a muted trend in domestic equities and strength of the American currency in the overseas markets.

Forex traders said the latest Federal Open Market Committee (FOMC) minutes reveal a significant shift in the Federal Reserve's outlook. The Fed is likely to put downward pressure on short-term interest rates, reducing the appeal of dollar-denominated assets and contributing to the decline in the Dollar Index.

At the interbank foreign exchange, the rupee opened at 84.45 and moved in a tight range and touched 84.47 against the greenback, registering a fall of 7 paise over its previous close.

On Wednesday, the rupee depreciated by 11 paise to close at 84.40 against the US dollar.

"The 84.50 level remains a strong support for the USD/INR pair. RBI interventions, coupled with anticipated capital inflows -- such as Godrej Properties' Rs 4,000 crore QIP and Univest's $16 million capital raise -- are expected to support the rupee further," CR Forex Advisors MD Amit Pabari said.

Pabari further added that the USD/INR pair is likely to encounter resistance near the 84.50 mark, with expectations of trading within the 83.80 to 84.50 range, showing a slight downward bias.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.14 per cent at 106.22.

Brent crude, the global oil benchmark, fell 0.18 per cent to $72.70 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex rose 68.21 points or 0.09 per cent to 80,302.29 in morning trade, while Nifty was up 34.20 points or 0.14 per cent to 24,309.10 points.

Foreign Institutional Investors (FIIs) infused Rs 7.78 crore in the capital markets on a net basis on Wednesday, according to exchange data.