Rupee depreciates 7 paise to 82.08 against US dollar amid strong demand

The rupee depreciated 7 paise to 82.08 against the US dollar in early trade on Wednesday, weighed down by strength of the American currency in the overseas market amid an increased demand for the dollar from importers.

Sustained foreign fund inflows supported the local unit and contained the fall.

At the interbank foreign exchange, the domestic unit opened at 82.05, then fell to 82.08, registering a decline of 7 paise over its last close.

On Tuesday, the rupee had settled at 82.01 against the dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.08 per cent to 103.12.

Brent crude futures, the global oil benchmark, fell 0.59 per cent to USD 75.80 per barrel.

"Rupee has been ranged in the past few days with dips to the USD getting bought by RBI/oil companies. In-flows continue to be showing strong momentum as FPIs continue to be in a strong buying mode in respect of equities and debt," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Bhansali further noted that the Federal Open Market Committee (FOMC) minutes and Nonfarm Payrolls are the important data releases to be watched.

In the domestic equity market, the 30-share BSE Sensex was trading 70.76 points or 0.11 per cent lower at 65,408.29. The broader NSE Nifty declined 13.90 points or 0.07 per cent to 19,375.10.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday as they purchased shares worth Rs 2,134.33 crore, according to exchange data.