Rupee falls 7 paise to 88.69 against US dollar in early trade

Mumbai: The rupee traded in a narrow range and depreciated by 7 paise to 88.69 against the US dollar in early trade on Thursday, as strong US dollar index and a muted trend in domestic equities weighed on investors’ sentiment.

Forex traders said the rupee is trading in a tight range, with renewed optimism over US-India trade talks providing a steady anchor. In contrast, a steady US dollar index dented investors’ sentiment.

The US dollar index is hovering near 99.50, as the market braced for the final chapter of the US government shutdown saga.

At the interbank foreign exchange market, the rupee opened at 88.66 against the US dollar before dropping to 88.69, down 7 paise from its previous close.

On Wednesday, the rupee depreciated 12 paise to close at 88.62 against the US dollar.

"The USD/INR pair finds a crucial support at 88.40. A sustained break below this level could open the door toward 87.70–88.00, signalling further rupee strength. On the upside, resistance lies at 88.70–88.80," CR Forex Advisors MD- Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent higher at 99.51.

Brent crude, the global oil benchmark, was trading 0.13 per cent lower at USD 62.63 per barrel in futures trade.

On the domestic equity market front, the Sensex declined 205.08 points to 84,261.43 in early trade, while the Nifty dropped 61.15 points to 25,814.65.

Foreign Institutional Investors sold equities worth Rs 1,750.03 crore on Wednesday, according to exchange data.

Meanwhile, the government on Wednesday approved an Export Promotion Mission (EPM) with an outlay of Rs 25,060 crore for six financial years, beginning this fiscal year, a move which will help exporters deal with high tariffs imposed by the US.

The mission will be implemented through two sub-schemes -- Niryat Protsahan (Rs 10,401 crore) and Niryat Disha (Rs 14,659 crore).

"These measures are part of broader efforts to strengthen exports and contain the trade deficit, a factor that ultimately supports the currency by easing pressure on the rupee and maintaining external stability," Pabari added.