Rupee depreciates 16 paise to 73.95 against US dollar in early trade

The rupee depreciated 16 paise to 73.95 against the US dollar in opening trade on Tuesday tracking muted domestic equities and weakened risk appetite amid concerns about a new virus strain.

Traders said rupee is trading on a weak note against the US dollar as the greenback rebounded amid safe haven appeal for the currency.

At the interbank forex market, the domestic unit opened at 73.95 against the US dollar, registering a fall of 16 paise over its previous close.

On Monday, the rupee plunged 23 paise to end at a two-week low of 73.79 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.26 per cent to 90.27.

"The risk sentiment was jolted by the news of a new strain of virus emerging in the UK and consequently about 40 countries imposing bans on flights arriving from the UK," said Abhishek Goenka, Founder and CEO, IFA Global.

The variant, which officials say is up to 70 per cent more transmissible than the original, triggered concerns about a wider spread which has prompted several European countries to take measures to prevent people arriving from Britain, including bans on flights and trains, Reliance Securities said in a research note.

Further, Asian currencies were weak this morning and could weigh on sentiments, the note added.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 6.65 points lower at 45,547.31 and the broader NSE Nifty fell 2.10 points to 13,326.30.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 323.55 crore on a net basis on Monday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 0.51 per cent to USD 50.56 per barrel.