Rupee falls 1 paisa to 88.03 against US dollar in early trade

Mumbai, Sep 4 (PTI) Rupee fell 1 paisa to 88.03 against the US dollar in a highly volatile morning trade on Thursday amid sustained FII outflows and a stronger greenback.

Goods and Services Tax (GST) rate cuts, which buyoed market sentiments, and a drop in global oil prices limited losses in the local unit, according to forex traders.

At the interbank foreign exchange, the domestic unit opened weaker at 88.09 against the US dollar and rose sharply to 87.85 before slipping again to 88.03, down 1 paisa from its previous close.

The rupee recovered 13 paise from its all-time low level to settle at 88.02 against the US dollar on Wednesday.

"The rupee opened weaker, and gained slightly, after inflows from various sources brought it down. However, the bids are still there, preventing it to gain further despite GST rate cuts putting money into the hands of the public. We expect a range of 87.90-88.40 for the rupee today (Thursday)," 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 up 0.07 per cent to 98.21.

Brent crude, the global oil benchmark, was trading 0.49 per cent lower to USD 67.27 per barrel in futures trade.

"Brent oil prices extended losses from the previous trading session as investors and traders look ahead to a meeting of OPEC+ oil producers who are expected to further increase output targets," Bhansali said.

On the domestic equity market front, Sensex jumped 888.96 points to 81,456.67 in opening trade, while Nifty surged 265.7 points to 24,980.75.

Foreign institutional investors offloaded equities worth Rs 1,666.46 crore on Wednesday, according to exchange data.

On the domestic macroeconomic front, the Indian services sector growth touched a 15-year high in August, driven by a sharp rise in new orders and output, amid substantial improvement in demand conditions, a monthly survey said on Wednesday.

The seasonally adjusted HSBC India Services PMI Business Activity Index was up from 60.5 in July to 62.9 in August, indicating the steepest rate of expansion since June 2010. PTI TRB TRB DR DR