As US dollar strengthens, rupee falls 14 paise to 79.70 in early trade

The rupee depreciated by 14 paise to 79.70 against the US dollar in opening trade on Friday, weighed down by strength of the American currency in the overseas market.

At the interbank foreign exchange market, the rupee opened at 79.63 against the greenback, then fell further to 79.70, registering a decline of 14 paise over its last close.

On Thursday, the rupee declined by 4 paise to close at 79.56 against the dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.12 per cent to 109.55.

The rupee opened on a weak note as the dollar index advanced to 109.60 with the British pound falling to its lowest in two years while Yen touched the 140-mark, said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.

Forex traders said though oil prices remained subdued, weak Asian and emerging market peers and higher inflation expectation might weigh on the local currency.

The global oil benchmark Brent crude futures advanced 1.83 per cent to USD 94.05 per barrel.

On the domestic macroeconomic front, the GST tax collection was at Rs 1.44 lakh crore for the 6th consecutive month in August.

Moody's Investors Service on Thursday slashed India's economic growth projection for 2022 to 7.7 per cent, citing dampening of economic momentum in coming quarters on rising interest rates, uneven monsoon, and slowing global growth.

This is a sharp 1.1 percentage points cut from the growth projection of 8.8 per cent for the current year made in May by Moody's.

On the domestic equity market front, the 30-share BSE Sensex was trading 151.29 points or 0.26 per cent higher at 58,917.88, while the broader NSE Nifty advanced 57.25 points or 0.33 per cent to 17,600.05.

Foreign institutional investors turned net sellers in the capital market on Thursday as they offloaded shares worth Rs 2,290.31 crore, as per exchange data.