Rupee falls 23 paise to 89.94 against US dollar in early trade

The rupee weakened 23 paise to 89.94 against the US dollar in early trade amid foreign fund outflows, weak domestic equities and rising crude oil prices, with thin holiday volumes and trade deal uncertainty weighing on market sentiment

Mumbai: The rupee depreciated 23 paise to 89.94 against the US dollar in early trade on Friday, weighed down by foreign fund outflows and recovery in crude oil prices.

Forex traders said a negative trend in domestic equities, dollar demand from importers, and trade deal uncertainty further dented investor sentiment.

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At the interbank foreign exchange, the local unit opened at 89.84 against the dollar but lost ground to trade at 89.94, down 23 paise from its previous close.

On Wednesday, the rupee pared initial gains and settled for the day lower by eight paise at 89.71 against the US dollar.

Forex and equity markets were closed on Thursday for Christmas.

After strengthening to the 89.00 level last week, the rupee has again started to weaken in holiday-thin trade, with FPIs continuing to sell equity and buy dollars after a brief pause, said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.08 per cent lower at 97.89.

Brent crude, the global oil benchmark, was trading 0.16 per cent higher at USD 62.34 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex declined 183.42 points to 85,225.28 in early trade, while the Nifty dipped 46.45 points to 26,095.65.

Foreign institutional investors offloaded equities worth Rs 1,721.26 crore on Wednesday, according to exchange data.