Currency Market News: Rupee falls 6 paise to 85.78 vs US dollar

Rupee declined by 6 paise to 85.78 against the US dollar in early trade on Wednesday, weighed down by weak domestic equities and a strengthening greenback in the global market.

According to Forex traders, the rupee faced pressure due to liquidity constraints, concerns over reciprocal tariffs, and increased demand for the US dollar from importers toward the end of the month. However, foreign fund inflows provided some support at lower levels.

At the interbank foreign exchange market, the rupee opened at 85.71 against the dollar before slipping to 85.78, marking a 6 paise drop from its previous close. On Tuesday, the currency had ended its seven-session winning streak, closing 11 paise lower at 85.72.

Also Read:Currency Market News: Rupee slips by 13 paise to Rs 85.74 vs US dollar

"RBI's USD 77.53 billion in short-side forward positions signals potential dollar-buying intervention, which could cap the rupee's gains. Additionally, geopolitical risks -- from Israel's offensive in Gaza to US air strikes on Iran-backed Houthi rebels -- are driving demand for safe-haven assets like the US dollar," CR Forex Advisors MD Amit Pabari said.

Meanwhile, the US dollar index, which measures the greenback’s strength against six major currencies, rose 0.12% to 104.30.

In global markets, Brent crude futures were trading 0.22 per cent higher at $73.18 per barrel.

"Meanwhile, US President Donald Trump has threatened a 25 per cent tariff on countries purchasing oil and gas from Venezuela. This has pushed Brent crude prices over USD 72.50 per barrel, raising concerns over India's trade deficit and adding downward pressure on the rupee," Pabari added.

Also Read:First Trade: Indices open mixed; Nifty steady at 22,670, Sensex falls 94 points

Stock Market Summary

Indian equities opened on a positive note on Wednesday, mirroring gains in Asian markets. The Nifty started nearly flat at 23,669.85, edging up 0.01 per cent or 1.2 points, while the Sensex slipped 0.12 per cent or 94.15 points to 77,923.04 at the opening bell.

On the other hand, Foreign institutional investors (FIIs) were net buyers on Tuesday, purchasing equities worth Rs 5,371.57 crore, according to exchange data.

(With PTI inputs)