The rupee depreciated 10 paise to 82.35 against the US dollar in early trade on Wednesday, weighed down by the strength of the American currency in the overseas market and a negative trend in domestic equities.
At the interbank foreign exchange, the domestic unit opened at 82.29 against the dollar, then fell to 82.35, registering a decline of 10 paise over its last close.
On Tuesday, the rupee settled at 82.25 against the dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.04 per cent to 102.60.
Brent crude futures, the global oil benchmark, advanced 0.11 per cent to $74.99 per barrel.
“A risk-off sentiment could increase the demand for USD or if Houses manage to crack the deal, then on rising prospects of continuation of US growth, the USD will strengthen and other emerging market currencies will weaken,” CR Forex Advisors Managing Director Amit Pabari said.
However, a slew of FDI (Foreign Direct Investment) flows could restrict the intensity of depreciation. Further, the Reserve Bank of India could also keep a close eye on the rates and volatility, Pabari added.
In the domestic equity market, the 30-share BSE Sensex was trading 110.89 points or 0.18 per cent lower at 61,821.58. The broader NSE Nifty declined 26.45 points or 0.14 per cent to 18,260.05.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday as they purchased shares worth ₹1,406.86 crore, according to exchange data.