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The rupee depreciated 42 paise to 82.50 against the US dollar in early trade on February 6, weighed down by a stronger American currency and a muted trend in domestic equities.
Forex traders said steady outflow of foreign funds and firming crude oil prices further weighed on investor sentiment.
At the interbank foreign exchange, the domestic unit opened weak at 82.35 against the dollar, then declined to 82.50, registering a decline of 42 paise over its previous close.
The rupee had closed at 82.08 against the US dollar in the previous session on Friday.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.17% to 103.09.
Global oil benchmark Brent crude futures rose 0.25% to 80.14 per barrel.
The rupee started on a weaker note against the dollar on Monday after a better-than-expected US jobs report prompted investors to look for further Federal Reserve rate hikes, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Support for the USD/INR spot pair lies at 81.9100 and 81.6000, and resistance lies at 82.5000 and 82.7500 and the pair is likely to remain within this Monday’s levels, Mr. Iyer said.
Mr Iyer said the major trigger for the markets this week would be the RBI MPC meeting scheduled for February, although further gains in the greenback could put pressure on sentiment.
The Reserve Bank may settle for a smaller increase in the repo rate by 25 basis points in its upcoming bi-monthly monetary policy later this week, as retail inflation shows signs of easing and the US Fed steps up its benchmark interest hike pace. reducing. Rate.
In the domestic equity market, the 30-share BSE Sensex was trading at 60,598.93, down 242.95 points or 0.40%. The broader NSE Nifty fell 100.20 points, or 0.56%, to 17,753.85.
Foreign institutional investors (FIIs) were net sellers in the capital market on February 3 as they sold shares worth ₹932.44 crore, according to exchange data.