Rupee appreciates 7 paise to 83.24 against US dollar in early trade

The rupee appreciated by 7 paise to 83.24 against the US dollar on Wednesday amid softening crude oil prices in the international market.

Forex traders said the local unit faced some resistance due to subdued sentiment in the domestic equity market and foreign fund outflows.

At the interbank foreign exchange market, the local unit opened at 83.29 and inched up further to trade at 83.24 against the greenback, registering a gain of 7 paise from its previous closing level.

On Tuesday, the rupee appreciated 6 paise to close at 83.31 against the US dollar.

"As the rupee seems to have started aligning with its fundamentals, in the short term, one can expect the Rupee to approach levels of 83.00 to 83.10, while the medium-term target is projected to range between 82.80 to 82.50 levels," CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.63, lower by 0.02 per cent.

Brent crude futures, the global oil benchmark, declined 0.65 per cent to $82.34 per barrel.

On the domestic equity market, the 30-share BSE Sensex was trading 37.12 points, or 0.05 per cent lower at 73,916.19 points. The broader NSE Nifty was down 30.40 points, or 0.13 per cent, to 22,498.65 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth Rs 1,874.54 crore, according to exchange data.

On the macroeconomic front, according to an article in the RBI's May Bulletin released on Tuesday, India is likely to grow by 7.5 per cent in the first quarter of the current financial year, driven by rising aggregate demand and non-food spending in the rural economy.