Rupee falls 12 paise to 94.50 against US dollar in early trade

The Indian rupee slipped 12 paise to 94.50 against the US dollar during early trade on Thursday, as per forex analysts. This dip was attributed to weak domestic markets and high crude oil prices. However, the decline was tempered by a weaker US dollar and falling US Treasury yields. The rupee opened at 94.47 at the interbank foreign exchange market and fell to 94.50, a decline of 12 paise from its previous close.

On Wednesday, the rupee had risen 53 paise to close at 94.38 against the US dollar. Anuj Choudhary, a research analyst at Mirae Asset Sharekhan, anticipates the rupee to have a slight positive bias due to foreign inflows from IPOs and a weaker dollar. Softening of US Treasury yields and reports that Russia is open to new peace talks could also bolster the rupee, according to Choudhary.

Traders are advised to monitor weekly unemployment claims data from the US. The dollar index, which measures the dollar's strength against six major currencies, declined 0.21 percent to 101.56. Brent crude, a global oil benchmark, rose by 1.58 percent to $110.54 per barrel in futures trade. The rupee's value is currently fluctuating between 94-97, as per Anindya Banerjee, Head of Commodity and Currency Research at Kotak NEO.

The RBI has bought time, the Jio IPO has provided additional dollar supply, and a potential US trade agreement could strengthen the structural inflow story. However, if portfolio selling intensifies or crude oil prices surge towards $120, the balance may be tested. On the domestic stock market, the Sensex fell 642.51 points to 73,067.18, while the Nifty declined 241.35 points to 22,570.90 in early trade.

Foreign Institutional Investors (FIIs) bought equities worth ₹1,022.32 crore on a net basis on Wednesday.