The rupee witnessed a range-bound trading against the US dollar in early trade on Thursday, weighed down by a negative trend in domestic equities and a strong American currency.
Forex traders said the Indian rupee was weighed down by a rising dollar index, following hawkish comments from Federal Reserve officials.
At the interbank foreign exchange, the rupee opened at 83.16 against the dollar, registering a fall of 5 paise over its previous close. The domestic unit also touched 83.08 against the American currency in initial trade.
On Wednesday, the rupee staged a sharp rebound from its lifetime low levels and surged by 21 paise to close at 83.11 against the US dollar.
"After a hawkish FED, not ruling out one hike in 2023 due to sticky inflation and keeping interest rates fall in 2024 by a smaller than expected margin, the comments boded poorly for Asian markets given that it tightens monetary conditions and limits flow of foreign capital in the region," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
The FOMC also stressed that the long-term projections are inherently uncertain and subject to change as the financial atmosphere is highly dynamic and contains numerous potential risks that could influence future outcomes, Bhansali said.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.21 per cent to 105.55.
Oil prices
Oil prices fell on Thursday after the US Fed decided to leave the interest rates unchanged. Brent crude futures for November lost 68 cents at $93.66 per barrel and US West Texas Intermediate crude fell to $90.52 per barrel with a loss of 68 cents.
Share market
The markets on Thursday morning opened lower with Sensex at 66,510.65, down by 290.20 points and Nifty was at 19,827.35 with a loss of 74.05 points. Mahindra and Mahindra, Tata Motors, Bajaj Finance, Titan and Axis Bank were the top gainers in the morning session, whereas HDFC Bank, HCL Tech, ICICI Bank, Reliance and Maruti were among the losers.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 3,110.69 crore, according to exchange data.
With inputs from Agencies.
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