Rupee drops 5 paise to 85.69 in early trading

The rupee dropped 5 paise to 85.69 against the US dollar in early trade, the first session of 2025

Mumbai: The rupee dropped 5 paise to 85.69 against the US dollar in early trade on Wednesday, the first session of 2025, as the strength of the American currency in the overseas market and persistent foreign fund outflows weighed on the local unit.

Forex traders said the dollar index (DXY) and US 10-year bond yields have been on an uptrend largely owing to the Federal Reserve’s cautious stance and the “Trump factor”.

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Additionally, global markets are expected to see low volumes as the holiday season is underway in major economies like the UK and Europe.

At the interbank foreign exchange, the rupee opened at 85.63 then fell further to 85.69 against the American currency, registering a fall of 5 paise over its previous close, On Tuesday, the rupee depreciated 12 paise to close at a fresh all-time closing low of 85.64 against the US dollar.

On December 27, the local currency touched its lifetime intraday low of 85.80 against the greenback. According to Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP, the Indian rupee was protected by the Reserve Bank of India (RBI) at 85.6450 on Tuesday.

“With US markets closed on Wednesday, cash dollar demand will not be there. A lower opening on USDINR could be an opportunity for importers to buy dollars for their payables. The range for the day would be 85.40 to 85.70,” Bhansali said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 104.48. Brent crude, the global oil benchmark, was quoted at USD 74.64 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 127.91 points or 0.16 per cent down at 78,011.10 points in morning trade, while Nifty was down 36.30 points or 0.15 per cent to 23,608.50 points.