Rupee depreciates 8 paise to 82.78 against US dollar in early trade

The rupee depreciated 8 paise to 82.78 against the US dollar in early trade on Friday, weighed down by a strong American currency and a muted trend in domestic equities.

At the interbank foreign exchange, the domestic unit opened weak at 82.77 against the dollar, then fell further to 82.78, registering a decline of 8 paise over its last close.

In the previous session on Thursday, the rupee settled at 82.70 against the dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.40 per cent to 104.27.

"The dollar index rose beyond 104 levels as the US Producer Price Index (PPI) came higher than expected taking US 10-year yields to 3.89 per cent," said Anil Kumar Bhansali, Head of Treasury Finrex Treasury Advisors LLP.

According to him, the chances of the rupee breaking the 83 level is high if the dollar index rises further.

Meanwhile, Brent crude futures, the global oil benchmark, declined 0.79 per cent to USD 84.47 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 181.5 points or 0.30 per cent lower at 61,138.01 points. The broader NSE Nifty declined 49.65 points or 0.28 per cent to 17,986.20 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday as they purchased shares worth Rs 1,570.62 crore, according to exchange data.