The rupee declined 29 paise to 75.58 against the US dollar in the opening trade on Wednesday tracking the strengthening of the American currency in the overseas market and a negative trend in domestic equities.
Forex traders said the expectations of rate hikes by the US Fed to rein in decades-high inflation are also keeping the dollar index buoyant, a key headwind for the Indian rupee.
At the interbank foreign exchange, the rupee opened lower at 75.50 against the US dollar, then slipped to 75.58, registering a decline of 29 paise over its previous close.
On Tuesday, the rupee rose for the third straight session and climbed 24 paise to close at 75.29 against the US dollar.
''The rupee is expected to weaken against the US currency tracking the overnight gains of the dollar as hawkish comments from Fed policymakers lifted the greenback,'' Sriram Iyer, Senior Research Analyst at Reliance Securities, said.
Asian and emerging market peers were weaker against the US dollar this Wednesday morning and will weigh on sentiments, Iyer said, adding that investors will await cues from the RBI monetary policy meeting.
Global oil benchmark Brent crude futures advanced 0.11 percent to USD 106.89 per barrel.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, surged 0.12 percent to 99.59.
On the domestic equity market front, the 30-share Sensex was trading 458.91 points or 0.76 percent lower at 59,717.59, while the broader NSE Nifty slipped 123.70 points, or 0.69 percent, to 17,833.70.
Foreign institutional investors remained net buyers in the capital market on Tuesday as they purchased shares worth Rs 374.89 crore, according to stock exchange data.
(With PTI inputs)
