Rupee rises 14 paise to 86.81 against US dollar in early trade

The rupee climbed 14 paise to 86.81 against the US dollar in early trade on Thursday on the back of easing American currency and receding crude oil prices overseas.

The local unit, which was under pressure due to unending foreign fund withdrawal, found support due to some recovery in domestic equity markets triggered by the better-than-expected inflation data that was released by the government on Wednesday, forex traders said.

At the interbank foreign exchange, the rupee opened stronger at 86.82 and gained further ground to trade at 86.81 against the greenback during early deals, registering a gain of 14 paise from its previous close.

On Wednesday, the domestic unit closed 16 paise lower at 86.95 against the dollar. In the preceding session on Tuesday, the rupee had appreciated 66 paise, logging the maximum single-day gain since March 3, 2023, to close at 86.79 against the greenback.

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.22 per cent lower at 107.59.

Analysts said the dollar weakened after the US data showed higher-than-expected inflation, dousing hopes of an immediate monetary easing by the Federal Reserve.

Brent crude, the global oil benchmark, dropped 1.00 per cent to USD 74.43 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 167.97 points, or 0.22 per cent, higher at 76,339.05 points, while the Nifty was up 45.15 points, or 0.20 per cent, at 23,090.40 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 4,969.30 crore on net basis on Wednesday, according to exchange data.