MUMBAI: The rupee fell 8 paise to 95.38 against the US dollar in early trade on Tuesday amid no breakthrough in the ongoing West Asia crisis, which kept global markets on edge and pushed up crude oil prices overnight.
A decline in domestic equity markets in early trade maintained pressure on the local unit while FII inflows and intervention by the Reserve Bank of India (RBI) provided support, preventing a further slide, forex traders said.
At the interbank foreign exchange market, the rupee opened at 95.38 against the US dollar and maintained that level till the time of publishing the copy.
The rupee declined 13 paise to settle at 95.30 against the US dollar on Monday.
"The rupee traded in a relatively narrow range (on Monday) despite Brent rising towards USD 84. The downside was contained by RBI intervention, with state-run banks reportedly selling dollars on the central bank's behalf," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
"Today Brent has gone past USD 87 per barrel as Iran and the US continue to harbour the Strait of Hormuz uncertainty on fading hopes of a deal happening soon," he added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.77, down 0.04 per cent.
Brent crude, the global oil benchmark, which rose sharply since the USD 84/barrel-levels on Monday, was trading lower by 0.06 per cent at USD 87.67 per barrel in futures trade.
On the domestic equity market front, Sensex declined 320.14 points to 78,204.40 in early trade while the Nifty fell 94.35 points to 24,490.85.
Foreign institutional investors purchased equities worth Rs 1,974.76 crore on a net basis on Monday, according to exchange data.