Rupee turns flat at 84.07 against US dollar on foreign fund outflow

The rupee stayed flat at 84.07 against the US dollar in early trade on Thursday amid elevated crude oil prices and continuous withdrawal of foreign funds from capital market.

However, the local unit found some cushion as the dollar retreated from its higher level while the domestic equity markets indicated a recovery, forex traders said.

At the interbank foreign exchange, the rupee opened at 84.06 against the greenback and slipped 1 paisa to trade at previous day's closing level in initial deals.

On Wednesday, the rupee had settled with a marginal gain of 1 paisa at 84.07 against the US dollar.

The local currency has been struggling to recover since October 11, when it closed at its lowest level of 84.10 against the dollar.

Analysts said the selling rush by foreign investors in pursuit of better gains from the Chinese market has been preventing rupee's recovery, while higher US treasury yields has triggered the fear of slower interest rate cut by the Federal Reserve.

Amid uncertain geopolitics weeks ahead of the US presidential election also steered investors towards safe-haven bets, they said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell marginally by 0.07 per cent but remained elevated at 104.20.

Brent crude, the international benchmark, rose 1.27 per cent to USD 75.91 per barrel in futures trade.

On the domestic equity market front, Sensex rose 68.86 points, or 0.09 per cent, to 80,150.84 points. The Nifty slipped 23.50 points, or 0.10 per cent, to 24,412.00 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 5,684.63 crore, according to exchange data.