Rupee falls 41 paise to 75.19 against US dollar in early trade

The rupee declined 41 paise to 75.19 against the US dollar in opening trade on Thursday, tracking the strength of the American currency after hawkish US Fed policy stance.

Forex traders said muted domestic equities, sustained foreign fund outflows and firm crude oil prices also weighed on the local unit.

At the interbank foreign exchange, the rupee opened weak at 75.18 against the US dollar, then fell further to 75.19, registering a decline of 41 paise from the last close.

On Tuesday, the rupee settled at 74.78 against the US dollar.

The forex and equity markets were closed on Wednesday on account of Republic Day.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.15 per cent to 96.61.

Global oil benchmark Brent crude futures fell by 0.80 per cent to USD 89.24 per barrel.

"The Indian Rupee witnessed a gap down trade this Thursday morning as the dollar and Treasury yields bounced after US Federal Reserve Chairman Jerome Powell signalled a shift away from pandemic-era economic support measures, with the central bank on course for a March interest rate hike, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Moreover, Asian currencies were weak this Thursday morning and uncertainty over Ukraine will also weigh on sentiments, Iyer said, adding that the Reserve Bank of India could be present to curb volatility.

On the domestic equity market front, the 30-share Sensex was trading 323.98 points or 0.55 per cent lower at 59,507.20, while the broader NSE Nifty declined 258.55 points or 1.5 per cent to 17,019.40.

Foreign institutional investors remained net sellers in the capital market on Tuesday, as they offloaded shares worth Rs 7,094.48 crore, as per exchange data.