A strengthening dollar and weaker sentiments in the domestic equity markets put additional pressure on the rupee, forex traders said.
At the interbank foreign exchange, the rupee opened at 89.96 against the US dollar and later rose to 89.90, lower by 3 paise from its previous close.
The rupee rose 31 paise to close at 89.87 against the US dollar on Wednesday on possible intervention by the Reserve Bank of India (RBI) and a fall in global crude oil prices.
“The RBI capped the dollar strength against rupee at 90.30 and did not allow it go beyond this by selling at 90.22 levels on Wednesday, despite the constant dollar demand from FPIs and importers who kept buying dollars on all dips up to 89.75,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
“Today the upside seems to be capped while the downside could extend to 89.50 if the RBI continues to intervene in the market,” he said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.01 per cent higher at 98.69. Brent crude, the global oil benchmark, was trading 0.38 per cent higher at USD 60.19 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex declined 255.86 points to 84,705.28 in early trade, while the Nifty slipped 65.9 points to 26,074.85.
Foreign institutional investors offloaded equities worth Rs 1,527.71 crore on Wednesday, according to exchange data.
