Rupee falls 9 paise to 94.55 against US dollar in early trade

MUMBAI: The rupee depreciated 9 paise to 94.55 against the US dollar in early trade on Thursday pressured by the broad strength of the American currency in the overseas market.

Forex traders said a positive domestic market and softening of crude oil prices cushioned the downside.

At the interbank foreign exchange market, the rupee opened at 94.36, then fell to 94.55 against the US dollar, registering a fall of 9 paise from its previous close.

On Wednesday, the rupee stayed firm for the second straight session to settle 29 paise higher at 94.46 against the US dollar.

"Forward-looking markets are aggressively erasing the geopolitical risk premium built up from the US-Israel conflict with Iran, as a Democratic-controlled Congress is expected to severely constrain funding for military escalation and push for near-term diplomatic negotiations," said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.22, lower by 0.34 per cent.

Brent crude, the global oil benchmark, was trading lower by 1.04 per cent at USD 93.64 per barrel in futures trade.

"Global crude benchmark Brent oil plunged over 8 per cent overnight, breaking below the psychological USD 100 per barrel barrier to trade at USD 93.84 on Thursday morning.

"The massive sell-off-marking crude's worst single-day decline since May—was triggered by the sweeping Democratic victory in the US midterm elections," Bhansali added.

On the domestic equity market front, Sensex jumped 1,403.71 points to 78,689.87 in early trade; Nifty surged 378.85 points to 24,340.40.

Foreign Institutional Investors (FIIs) remained net buyers on Wednesday, purchasing equities worth Rs 7,284.03 crore, according to exchange data.