weakened 8 paise to 88.67 against the in early trade on Tuesday as equity market faced selling pressure amid global trade related uncertainties.
A weak American currency, lower crude oil prices and some inflow of foreign capital into domestic stocks failed to support the Indian currency, forex analysts said.
They said investors are concerned about increasing import bills and widening trade deficit of the country. Also, traders were keenly watching the progress on the proposed India-US trade deal as well as the domestic PMI data to be released later this week.
At the interbank foreign exchange market, the rupee opened at 88.67 and slipped to 88.69 level before inching up to 88.68 against the greenback in initial deals, registering a loss of 8 paise from its previous closing level.
On Monday, the rupee settled 7 paise higher at 88.59 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 per cent lower at 99.43.
Brent crude, the global oil benchmark, was trading 0.47 per cent lower at $63.90 per barrel in futures trade.
On the domestic equity market front, declined 151.86 points, or 0.18 per cent, to 84,799.09 in early trade, while the went down 44.50 points, or 0.17 per cent, to 25,967.30.
Foreign institutional investors bought equities worth ₹442.17 crore on Monday, according to exchange data.
The latest government data released on Monday showed India’s exports contracted 11.8 per cent to $34.38 billion in October on account of the impact of high tariffs by the US, while the trade deficit widened to a record high of $41.68 billion, mainly due to a jump in gold imports.
The country’s imports jumped 16.63 per cent to $76.06 billion due to high inbound shipments of the yellow metal, silver, cotton raw/waste, fertiliser, and sulphur.
In September, the trade gap widened to $31.15 billion, the highest in over a year.
While gold imports rose about 200 per cent to $14.72 billion, silver rose 528.71 per cent to $2.71 billion during October.
Crude oil imports dipped to $14.8 billion in October from $18.9 billion in the same month last year.