Rupee drops 23 paise to 85.63 against US dollar amid stronger greenback, rising crude prices

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Mumbai: The rupee fell 23 paise to 85.63 against the US dollar in early trade on Wednesday, dragged down by strengthening American currency and an uptrend in crude oil prices.

The local unit also remained under pressure due to increased dollar demand at the end of the month from exporters and banks, even though foreign fund inflow stayed muted amid mixed sentiment in domestic equity markets, forex analysts said.

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Also, investors moved cautiously, awaiting cues from domestic as well as global macroeconomic data.

At the interbank foreign exchange, the domestic unit opened at 85.59 and fell further to 85.71 before trading again at 85.63 against the greenback, registering a fall of 23 paise from its previous close.

On Tuesday, the rupee closed 30 paise lower at 85.40 against the greenback.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.30 per cent at 99.72.

Analysts attributed the greenback’s strength to improving US consumer confidence and weakening yen amid a sharp fall in Japanese long-term bond yields.

Brent crude, the global oil benchmark, rose 0.41 per cent to USD 64.35 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex rose marginally by 23.86 points, or 0.03 per cent, to 81,575.49, while the Nifty inched up 28.90 points, or 0.12 per cent, to 24,855.10.

Foreign institutional investors (FIIs) purchased equities worth Rs 348.45 crore on a net basis on Tuesday, according to exchange data.