Rupee depreciates 8 paise to 79.82 against US dollar in early trade

The rupee depreciated by 8 paise to 79.82 against the US dollar in opening trade on Wednesday as investors await the US Fed's policy decision on interest rates for further cues.

Forex traders said the strength of the American currency in the overseas market and a muted trend in domestic equities weighed on the local unit. Moreover, risk-off moods and firm crude oil prices weighed on the local unit.

At the interbank foreign exchange market, the rupee opened at 79.81 against the greenback, then fell to 79.82, registering a decline of 8 paise over its last close.

In initial deals, the local unit also touched 79.79 against the dollar.

On Tuesday, the rupee settled 7 paise higher at 79.74 against the dollar.

Investors are awaiting the Federal Open Market Committee (FOMC) decision on interest rates this evening, Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors said, adding 75 basis points hike is factored in by the market but a 100 basis points rise will be a huge guidance and will take the dollar index higher.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.04 per cent to 110.26.

Global oil benchmark Brent crude futures rose 0.23 per cent to USD 90.83 per barrel.

On the domestic equity market front, the 30-share BSE Sensex was trading 23.85 points or 0.04 per cent higher at 59,743.59, while the broader NSE Nifty was up by 2.05 points or 0.01 per cent to 17,818.30.

Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 1,196.19 crore, as per exchange data.