The rupee opened on a weak note and fell 20 paise to 71.47 against the US dollar in early trade on Friday amid rising crude oil prices and cautious opening in domestic equities.
At the Interbank Foreign Exchange, the rupee opened weak at 71.33 then fell to 71.47 against the US dollar, showing a decline of 20 paise over its previous closing. The Indian rupee on Wednesday had closed at 71.27 against the US dollar. Forex market was closed on Thursday on account of Independence Day.
Traders said cautious opening in domestic equities, rising crude oil prices, strengthening of the greenback vis-a-vis other currencies overseas weighed on the local unit. While foreign fund inflows added support to the domestic unit.
Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 1,614.63 crore on Wednesday, as per provisional data. Meanwhile, brent crude futures, the global oil benchmark, rose 0.94 per cent to USD 58.78 per barrel.
Domestic bourses opened on a cautious note on Friday with benchmark indices Sensex trading 157.74 points down at 37,153.79 and Nifty lower by 55.55 points at 10,973.85.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.07 per cent to 98.21. The 10-year government bond yield was at 6.58 per cent in morning trade. On the global front, US President Donald Trump has said that China is doing very poorly as a result of the trade war.
"I think the longer the trade war goes on, the weaker China gets and the stronger we get. We're taking in massive amounts of money. Billions and billions of dollars. And I think the longer it goes, the stronger we get. I have a feeling it's going to go fairly short," he said on Thursday.