Rupee falls 7 paise to 95.40 against U.S. dollar in early trade

The rupee depreciated 7 paise to 95.40 against the U.S. dollar in early trade on Thursday, Aug 13 pressured by elevated crude oil prices and lingering geopolitical risks.

Forex traders said investor sentiment remains fragile, as the standoff between the U.S. and Iran does not seem to be nearing an end, with Iran warning of keeping the Strait of Hormuz closed till 2029, while the U.S. president said Hormuz was under U.S. command.

At the interbank foreign exchange market, the rupee opened at 95.40, registering a fall of 7 paise from its previous close. On Wednesday, the rupee closed at 95.33 against the American currency.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 100.01. Brent crude, the global oil benchmark, was trading 1.22% lower at USD 87.89 per barrel in futures trade.

"With oil prices near USD 88 a barrel but the dollar index higher at 100.01, the rupee opened at 95.40 on Thursday, after rising to 95.25 on Wednesday," said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP. "RBI has been continuously backing the rupee at 95.41-95.45 despite oil demand taking it lower," he said.

Foreign institutional investors offloaded equities worth Rs 1,002.50 crore on a net basis on Wednesday, according to exchange data.

On the domestic equity market front, the Sensex was trading 152.97 points lower at 77,813.38, while the Nifty was down 84.80 points at 24,351.15.