Rupee turns flat at 84.07 against US dollar in early trade

Forex traders say indication of some recovery in domestic equity markets prevented the fall in local unit

Mumbai: The rupee stayed in a straightjacket for yet another week, trading at its near all-time low of 84.07 against the US dollar on Friday amid firm American currency and unprecedented foreign fund outflow.

Forex traders said, the indication of some recovery in domestic equity markets prevented the fall in the local unit.

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At the interbank foreign exchange, the local currency opened at 84.07 against the greenback, trading flat at previous day’s closing level in initial deals.

On Thursday, the rupee had settled flat at 84.07 against the US dollar.

The local currency has been struggling to recover since October 11, when it closed at its lowest level of 84.10 against the dollar.

Analysts said the selling rush by foreign investors in pursuit of better gains from the Chinese market has been preventing the rupee’s recovery, while higher US treasury yields have triggered the fear of slower interest rate cut by the Federal Reserve.

Also, uncertain geopolitical scenario ahead of the US presidential election steered investors towards safe-haven bets, they added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was higher by 0.03 per cent at 103.95.

Brent crude, the international benchmark, climbed 0.24 per cent to $74.56 per barrel in futures trade.

On the domestic equity market front, Sensex rose 44.38 points, or 0.06 per cent, to 80,109.54 points. The Nifty inched up 27.35 points, or 0.11 per cent, to 24,426.75 points. Both the indices closed lower on Thursday, extending their slide for the fourth straight session.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 5,062.45 crore, according to exchange data.