Rupee falls 5 paise to 89.73 against US dollar in early trade

The rupee slipped 5 paise to 89.73 against the US dollar in early trade amid FII outflows and weak equities. Losses were capped by a softer dollar and lower crude prices, while markets await key US economic data 

Mumbai: The rupee fell 5 paise to 89.73 against the US dollar in early trade on Tuesday amid FII outflows and a weak opening in the domestic equity markets.

However, a weaker greenback and a drop in global crude oil prices prevented sharper losses in the local unit, according to forex traders.

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At the interbank foreign exchange, the local unit opened at 89.67 against the dollar but lost ground to trade at 89.73, down 5 paise from its previous close.

The rupee on Monday pared initial gains to settle slightly down by 1 paisa at 89.68 against the US dollar, as the support from positive domestic equities was negated by a recovery in crude oil prices.

“The rupee remains in the range of 89-90 broadly and 89.30-80 a bit narrowly. US weekly employment figures, GDP, consumer confidence data and PCE price index data will be looked into before the Christmas holidays,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.20 per cent lower at 98.08.

Brent crude, the global oil benchmark, was trading 0.12 per cent lower at US$ 61.99 per barrel in futures trade.

On the domestic equity market front, Sensex declined 116.57 points to 85,450.91 in early trade, while the Nifty was down 27.15 points to 26,145.25.

Foreign institutional investors offloaded equities worth Rs 457.34 crore on Monday, according to exchange data.

Meanwhile, India and New Zealand on Monday announced the conclusion of negotiations for a free trade agreement, under which a host of domestic goods from sectors such as textiles, footwear, engineering, and marine products will get duty-free access in New Zealand.