Representative image of Indian Rupee and US Dollar.
Credit: iStock Image.
Mumbai: The rupee opened on a flat note and depreciated 2 paise to 84.07 against the US dollar in initial deals on Wednesday, weighed down by persistent foreign fund outflows and muted domestic equities.
Forex traders said the strength of the American currency in overseas markets dented investor sentiments, while easing crude oil prices and any intervention by the Reserve Bank of India (RBI) may support the local currency at lower levels.
At the interbank foreign exchange, the rupee opened at 84.06 against the greenback. In the initial trade, it touched 84.07, down 2 paise from its previous closing.
On Tuesday, the rupee gained 2 paise to settle at 84.05 against the US dollar.
The local currency has been hovering around its all-time low level. Rupee touched its lowest closing level of 84.10 against the dollar on October 11.
According to traders, the rupee remains under intense pressure, mainly due to persistent foreign fund outflows.
"The Indian rupee remains firmly range-bound, trading between 83.90 and 84.10, with the RBI actively limiting any upside movement in the pair. This controlled approach suggests the rupee is likely to continue within this range, with a bias towards trading closer to the lower end," CR Forex Advisors MD Amit Pabari said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.31.
Brent crude, the global oil benchmark, was up 0.51 per cent to $71.48 per barrel in futures trade.
On the domestic equity market front, Sensex declined 325.94 points, or 0.41 per cent, to 80,043.09 points. The Nifty fell 90.75 points, or 0.37 per cent, to 24,376.10 points.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth Rs 548.69 crore, according to exchange data.