Mumbai, Aug 20: The rupee was trading in a tight range and depreciated 3 paise to 87.16 against the US dollar in early trade on Wednesday, tracking weak Asian peers and a negative trend in domestic equities.
Forex traders said investors are taking a cautious approach as the market eyes potential Russia-Ukraine talks.
Moreover, traders are awaiting cues from the US Federal Reserve Chief Jerome Powell’s speech on the path of monetary policy at the Jackson Hole Symposium this weekend.
At the interbank foreign exchange market, the rupee opened at 87.16 against the US dollar, registering a decline of 3 paise over its previous close.
In the initial trade, the rupee touched an early high of 87.10 against the greenback.
On Tuesday, the rupee had settled at 87.13 against the US dollar.
On Tuesday, the Indian rupee gained above the 87 level in intraday trade after a month, as exporters sold while FPIs selling in equities fell to just around Rs 600 crore while they bought in Indian debt, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
“However, since the dollar index has risen after US Treasury Secretary Scott Bessent warned of more tariffs against India for importing Russian Oil and also cosying up with China, the rupee opened on a lower note,” Bhansali said.
“The fall towards 86.91 on Tuesday was a good opportunity for importers to hedge their near-term payables, as on Wednesday the rupee opened at 87.16 and could head lower due to negatives in the market,” he added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.10 per cent to 98.36.
Brent crude, the global oil benchmark, was trading 0.14 per cent higher to USD 65.88 per barrel in futures trade.
On the domestic equity market front, Sensex declined 146.64 points to 81,497.75 in early trade, while the Nifty dropped 47.5 points to 24,933.15.
Foreign Institutional Investors offloaded equities worth Rs 634.26 crore on Tuesday, according to exchange data. (PTI)
