Rupee falls 7 paise to 83.38 against US dollar in early trade

The Indian rupee fell by 7 paise to 83.38 against the US dollar in early trade on April 12, 2024, due to a negative trend in domestic equities and elevated crude oil prices. 

The dollar index, which measures the strength of the US dollar against a basket of six currencies, was at 105.35, up 0.07 per cent. 

Brent crude futures, the global oil benchmark, rose 0.58 per cent to USD 90.26 per barrel. The strength of the US dollar in the overseas market and the rise in crude oil prices have affected investor sentiment. 

The rupee opened at 83.36 against the dollar and touched a low of 83.38 in the initial trade, registering a fall of 7 paise over its previous close. 

The domestic equity market also saw a decline, with the 30-share BSE Sensex trading 374.49 points, or 0.50 per cent lower at 74,663.66 points, and the broader NSE Nifty down 123.90 points, or 0.54 per cent, to 22,629.90 points. 

The rupee's depreciation is due to various factors, including the US treasury yields at a lifetime high, a strong US Dollar Index, and a global risk-averse environment. 

Higher US yields can signal expectations of tighter US monetary policy, which further strengthens the US dollar and can lead to capital outflows from emerging markets like India, exerting downward pressure on the rupee.