Currency Market News: Rupee trades in narrow range against US dollar in early trade

The rupee was trading in a narrow range against the US dollar in early trade on Friday, as the support from sustained foreign fund inflows was negated by dollar demand from foreign investors and oil companies.

Forex traders said a bounce back in crude oil prices weighed on the rupee. Moreover, weak Asian as well as European currencies may further dent investor sentiments.

At the interbank foreign exchange market, the local unit moved in a narrow range. It touched an early high of 83.62 and a low of 83.65 against the American currency.

On Thursday, the rupee depreciated 5 paise and settled at its all-time low of 83.63 against the US dollar.

On Thursday, the Indian rupee experienced a modest depreciation against the dollar, CR Forex Advisors MD Amit Pabari said, adding that this shift was influenced by elevated oil prices, increased demand for dollars from importers, and the RBI's efforts to keep the rupee within a tight range.

"However, given the robust fundamentals and the ever-rising Indian stock markets, the bias for the rupee remains optimistic," he added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 104.24, marginally higher by 0.07 per cent.

Brent crude futures, the global oil benchmark, fell 0.41 per cent to USD 84.76 per barrel.

On the domestic equity market, the 30-share BSE Sensex was trading 103.9 points, or 0.13 per cent lower at 81,239.56 points.

The broader NSE Nifty was down 49.05 points, or 0.2 per cent, to 24,751.80 points.

Meanwhile, the Asian currencies were all down after a fall in European currencies as the European Central Bank (ECB) kept rates unchanged in its meeting with a possibility of cut in September, traders said.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday as they purchased shares worth Rs 5,483.63 crore, according to exchange data.