Rupee rises 5 paise to 71.60 against US dollar in early trade

The Indian rupee appreciated by 5 paise to 71.60 against the US dollar in early trade on Thursday amid easing crude oil prices and weakening of the greenback in the overseas market.

Forex traders said easing crude oil prices and weakening of the American currency vis-a-vis other currencies overseas supported the rupee, while weak opening in domestic equities and sustained foreign fund outflows weighed on the local unit.

At the interbank foreign exchange the rupee opened at 71.65 then gained further ground and touched a high of 71.60, registering a rise of 5 paise over its previous close.

On Wednesday, rupee had settled for the day at 71.65 against the US dollar.

On the domestic front, market participants will be keeping an eye on third quarter GDP number and better-than-expected number could extend gains for the currency, traders said.

The domestic unit, however, could not hold on to the gains and was trading at 71.67 against the dollar at 1004 hrs.

Meanwhile, investor sentiment remained fragile amid concerns over the impact of coronavirus outbreak on the global economy, forex traders said.

The death toll from the new coronavirus epidemic now stands at 2,744 in mainland China and there are now nearly 78,500 cases in total, according to the National Health Commission.

Domestic bourses opened on a negative note on Thursday with benchmark indices Sensex trading 289.66 points lower at 39,599.30 and Nifty down 87.45 points at 11,591.05.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 3,336.60 crore on Wednesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 1.12 per cent to trade at 52.83 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.02 per cent to 98.97.

The 10-year government bond yield was at 6.34 per cent in morning trade.