Rupee falls 3 paise to 95.91 against US dollar in early trade

The Indian rupee slipped 3 paise to 95.91 per US dollar on Wednesday, facing headwinds from a robust American currency and a stream of foreign funds departing the country. Despite this, domestic stock markets bolstered the local currency, even as oil prices hovered at a high due to rising tensions in West Asia. At the interbank foreign exchange market, the rupee began the day at 95.89 against the US dollar, dropping further to 95.91, marking a 3 paise decline from its prior close.

On Tuesday, the rupee had weakened to 95.88 against the dollar, after a 113-paise drop, or more than 1 percent, over the past five trading sessions since September 4. Meanwhile, the dollar index, which tracks the greenback's strength against a basket of six currencies, rose to 99.38, up by 0.04 percent. This upward movement in the dollar index was linked to market forecasts of a Federal Reserve interest rate hike, scheduled for Wednesday.

Experts suggested the Federal Reserve may increase the funds rate for the first time in three years, aiming to curb inflation driven by higher oil prices. Brent crude, the global oil benchmark, fell 0.58 percent but stayed high at USD 108.12 per barrel in futures trade. West Asian conflicts, sparked by attacks from Iranian-backed Houthi rebels in Yemen against Saudi Arabia's shipping and infrastructure, have unsettled global oil markets.

Traders worry the conflict could disrupt Saudi oil exports out of the Red Sea. On the domestic equity market, the Sensex rose 240.75 points, or 0.33 percent, to 74,244.57 in early trade, while the Nifty advanced 83.70 points, or 0.36 percent, to 23,202.30. Foreign institutional investors (FIIs) sold equities worth Rs 2,977.86 crore on a net basis on Tuesday, as per exchange data.