The Indian rupee fell 1 paisa to 88.75 against the US dollar in early trade on Tuesday, pressured by a strong American currency and lingering uncertainties over the proposed India-US trade deal.
The rupee opened slightly higher at 88.72 in the interbank market but soon lost ground. On Monday, it had gained 5 paise to close at 88.74 against the greenback.
Forex traders attributed the fall to continued foreign capital outflows and geopolitical developments. The dollar index, measuring the US currency against a basket of six currencies, was up 0.06% at 97.86.
Global oil benchmark Brent crude was trading 0.34% higher at USD 65.69 per barrel in futures markets.
External Affairs Minister S Jaishankar highlighted that any trade deal with the US must respect India’s “red lines” and said negotiations are ongoing amid unresolved issues.
In domestic markets, Sensex opened 93.83 points higher at 81,883.95, while Nifty rose 46.35 points to 25,124. Foreign institutional investors sold equities worth Rs 313.77 crore on Monday.
On the macroeconomic front, India’s services sector growth eased in September, with the HSBC India Services PMI Business Activity Index falling to 60.9 from a 15-year high of 62.9 in August, reflecting slower expansion in new business and activity.