MUMBAI: The rupee depreciated 7 paise to 95.40 against the US dollar in early trade on Thursday pressured by elevated crude oil prices and lingering geopolitical risks.
Forex traders said investor sentiment remains fragile as the standoff between US and Iran does not seem to be coming to an end with Iran warning of keeping the Strait of Hormuz closed till 2029 while the US President saying that the Hormuz is in US’s command.
At the interbank foreign exchange market, the rupee opened at 95.40, registering a fall of 7 paise from its previous close.
On Wednesday, the rupee closed at 95.33 against the American currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 100.01.
Brent crude, the global oil benchmark, was trading lower by 1.22 per cent at USD 87.89 per barrel in futures trade.
With oil prices near to USD 88 a barrel but the dollar index higher at 100.01, the rupee opened at 95.40 on Thursday, after rising to 95.25 on Wednesday, said Anil Kumar Bhansali Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
"RBI has been continuously backing the rupee at 95.41-95.45 despite oil demand taking it lower," Bhansali said.
Foreign institutional investors offloaded equities worth Rs 1,002.50 crore on a net basis on Wednesday, according to exchange data.
On the domestic equity market front, the Sensex was trading lower by 152.97 points at 77,813.38, while the Nifty was down 84.80 points at 24,351.15.
