Rupee strengthens by 8 paise to 72.54 against US dollar in early trade

The Indian rupee appreciated amid improved risk appetite and the broad weakness of the greenback in the overseas market

The Indian rupee appreciated 8 paise to 72.54 against the US dollar in early trade on Tuesday amid improved risk appetite and the broad weakness of the greenback in the overseas market.

At the interbank foreign exchange, the domestic unit opened at 72.57 against the dollar, then inched higher to 72.54, registering a gain of 8 paise over its previous close.

On Monday, the rupee had settled at 72.62 against the US dollar.

The rupee started on a flat to stronger note this Tuesday against the dollar, tracking the overall weakness of the dollar. Absence of RBI and improved risk appetite in the region could lend support to the currency, Reliance Securities said in a research note.

Most Asian currencies have started mostly flat to stronger against the US dollar this morning and could aid the local unit, the note added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.03 per cent to 89.80.

Global oil benchmark Brent crude futures rose 1.24 per cent to USD 70.18 per barrel.

On the domestic equity market front, BSE Sensex was trading 40.85 points or 0.08 per cent higher at 51,978.29, while the broader NSE Nifty fell 5.30 points or 0.03 per cent to 15,577.50.

Foreign institutional investors were net buyers in the capital market on Monday as they purchased shares worth Rs 2,412.39 crore, as per exchange data.

On the marco-economic front, India's economy contracted by less-than-expected 7.3 per cent in the fiscal year ended March 2021 after growth rate picked up in the fourth quarter, just before the world's worst outbreak of coronavirus infections hit the country.

Meanwhile, India reported 1,27,510 fresh COVID-19 cases, the lowest in 54 days, while the daily positivity rate dropped to 6.62 per cent, according to the Union Health Ministry data updated on Tuesday.