Rupee drops 3 paise to 88.66 against U.S. dollar in early trade

The rupee declined 3 paise to 88.66 against the U.S. dollar in early trade on Friday as the American currency strengthened against major rivals and foreign investors kept on withdrawing funds from the Indian capital market.

According to forex traders, the Indian rupee was also weighed down amid intense selling in domestic equity markets and upward movement in crude oil prices in the overseas market.

At the interbank foreign exchange, the rupee opened at 88.61 and slid further to trade at 88.66 against the greenback in early deals, registering a loss of 3 paise from its previous closing level.

The domestic unit had settled with a gain of 7 paise at 88.66 against the dollar on Thursday.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.08% to 99.66.

Brent crude, the global oil benchmark, was higher by 0.39% but remained lower at $63.62 per barrel in futures trade.

“Crude oil prices fell on Thursday amid investor concerns over a possible oversupply and signs of softening demand in the United States, the leading global consumer of oil,” said Anand James, Chief Market Strategist, Geojit Investments Limited.

In the domestic equity market, Sensex crashed 610.92 points or 0.73% to 82,700.09 in early trade while Nifty tanked 169.50 points or 0.66% to 25,340.20.

Foreign institutional investors sold equities worth ₹3,263.21 crore on Thursday, according to exchange data.

According to a monthly survey released on Thursday, India’s services sector growth witnessed the slowest pace of expansion in five months in October, as competitive pressures and heavy rains in parts of the country led to a slower increase in output.

The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 60.9 in September to 58.9 in October, indicating the slowest pace of expansion since May.