Rupee appreciates 24 paise to 74.38 against US dollar in early trade

The rupee appreciated by 24 paise to 74.38 against the US dollar in opening trade on Tuesday, tracking positive domestic equities amid improved risk appetite.

Forex dealers said a weak dollar overseas supported the local unit.

At the interbank forex market, the domestic unit opened strong at 74.43 against the US dollar, then gained further ground to touch 74.38, registering a rise of 24 paise over its last close.

In the previous session, the rupee had settled at 74.62 against the US dollar.

"Global risk sentiment continues to remain positive. After Pfizer, Moderna's vaccine trials have yielded promising results (trials indicate it is 94.5 per cent effective in preventing Coronavirus and vaccine also does not need to be stored at ultra-low temperatures unlike Pfizer's)," said Abhishek Goenka, Founder and CEO, IFA Global.

Goenka further said that "the Rupee has been the worst performing Asian currency year to date. With inflation currently high primarily on account of higher food prices, we believe the RBI will gradually continue to weaken the Rupee in relative terms while continuing to manage volatility".

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, dipped 0.15 per cent to 92.50.

According to a Reliance Securities research note, "the safe-haven appeal for the greenback reduced after Moderna Inc became the second US company in a week to report positive results from its COVID-19 vaccine trial.

On the equity front, the 30-share BSE index rallied 274.66 points or 0.63 per cent to scale the fresh peak of 43,912.64. Similarly, the broader NSE Nifty gained 74.45 points or 0.58 per cent to a lifetime high of 12,854.70.

Brent crude futures, the global oil benchmark, rose 0.68 per cent to USD 44.12 per barrel.