Rupee slips 7 paise to 74.67 against US dollar in early trade

The rupee declined 7 paise to 74.67 against the US dollar in opening trade on Tuesday weighed down by the strength of the American currency and muted domestic equities.

Forex traders said geopolitical tensions, sustained foreign fund outflows and elevated crude oil prices also dragged down the local unit.

Further, investors will also await the outcome of the US Federal Reserve meeting this week.

At the interbank foreign exchange, the rupee opened flat at 74.60 against the US dollar, then slipped further to 74.67, registering a decline of 7 paise from the last close.

On Monday, the rupee had settled at 74.60 against the US dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.04 per cent to 95.95.

"The safe-haven US dollar rose to a 2-week high against its major peers on Monday amid escalating worries about both a faster pace of Federal Reserve policy tightening and potential military conflict in Ukraine," Reliance Securities said in a research note.

Most of the Asian and emerging market peers have started weaker this Tuesday morning amid risk-off trades amid geopolitical tensions near the Ukraine border, the note added.

Meanwhile, global oil benchmark Brent crude futures jumped by 0.54 per cent to USD 86.74 per barrel.

On the domestic equity market front, the 30-share Sensex was trading more than 305.79 points or 0.53 per cent lower at 57,185.72, while the broader NSE Nifty declined by 71.25 points or 0.42 per cent to 17,077.85.

Foreign institutional investors remained net sellers in the capital market on Monday, as they offloaded shares worth Rs 3,751.58 crore, as per stock exchange data.