Rupee opens on flat note, rises 3 paise to 95.34 against US dollar in early trade

Tuesday's early trading saw the Indian rupee open at a stable 95.35 against the US dollar, before climbing to 95.34, marking a 3 paise increase from the prior close. Forex experts attributed the slight gain to the broad-based weakness in the US Dollar Index, bolstered by improving global risk sentiment and foreign portfolio investments in Indian equities.

However, the dollar's demand from importers proved insufficient to counteract the downward pressure from lower oil prices and a softer US dollar, leading traders to focus on the upcoming RBI Monetary Policy Committee (MPC) decision and significant US economic indicators later in the week. Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP, noted that the rupee's range was likely to stay between 95 and 95.50 as oil prices and the dollar index remained remarkably stable.

The dollar index, which measures the greenback's strength against a basket of six currencies, traded at 99.99, a 0.09 percent gain, but struggled to surpass the psychologically significant 100 mark. The dollar's decline was attributed to the confidence in a more accommodative Federal Reserve policy, following recent soft US inflation data.

Brent crude, the global oil benchmark, rose 1.15 percent to USD 84.73 per barrel, but its substantial increase from July's high of over USD100 per barrel was influenced by easing Middle East tensions, expectations of higher OPEC+ production, and abundant global supply. Meanwhile, the domestic equity market witnessed a boost, with the Sensex rising 97 points to 78,736.20 and the Nifty falling 173.95 points to 24,600.35. Foreign Institutional Investors (FIIs) netted equity investments worth Rs 922.26 crore on Monday.