Rupee appreciates 9 paise to 83.56 against US dollar in early trade

The rupee sustained its gaining streak for the third straight session and rose 9 paise to 83.56 against the US dollar in early trade on Friday buoyed by a firm domestic equity market and weakening American currency.

Lower crude oil prices also supported the Indian currency though the unit was weighed down by some outflow of foreign funds, forex traders said.

At the interbank foreign exchange market, the Indian currency opened at 83.63 and strengthened further to 83.56 against the greenback, trading 9 paise higher than its previous closing level.

The local unit gained 11 paise to settle at 83.65 against the US dollar on Thursday after settling 10 paise higher on Tuesday.

The Forex market was closed on Wednesday due to a holiday declared by the Maharashtra government.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.07 per cent to 100.24.

Analysts said the dollar index retreated after the US Federal Reserve reduced the benchmark interest rate by 0.50 per cent, prompting investors to look towards emerging market currencies.

Brent crude, the international benchmark, declined 0.19 per cent to $74.74 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex climbed 238.10 points, or 0.29 per cent, to 83,422.90, while the Nifty advanced 84.45 points, or 0.33 per cent, to 25,500.25. Both the indices scaled new peaks on Thursday.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 2,547.53 crore, according to exchange data.