Currency market check: Rupee depreciates 16 paise to 90.11 against US dollar in early trade

Forex traders said strong dollar demand from corporates, importers and foreign portfolio investors pressurised the rupee.

At the interbank foreign exchange, the rupee opened at 90.07 against the US dollar then dropped to 90.11, down 16 paise from its previous close.

On Friday, the rupee settled at 89.95 against the US dollar, after the Reserve Bank of India cut the key policy interest rate for the first time in six months.

Forex traders said investors' focus has now shifted to the Fed’s policy outcome on December 9–10. Markets are placing nearly a 90% probability on a rate cut next week.

Meanwhile, India and the United States will commence three-day talks on the first phase of their proposed bilateral trade agreement here from December 10.

"The US team is in India on 10th December and simultaneously the EU team is also in India to meet the Commerce Minister on trade negotiations and finalising an FTA. We await for positive outcomes on both counts. " said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Bhansali further noted that, FPIs continue to remain sellers despite the India equities going up. The dollar Index is range bound, Asian currencies are range bound, so there are no specific cues from any front.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.11% lower at 98.88. Brent crude, the global oil benchmark, was trading higher by 0.17 cent at $63.85 per barrel in futures trade.

On the domestic equity market front, the benchmark sensitive index Sensex declined 215.73 points to 85,741.24 in early trade, while the Nifty was down 64.85 points to 26,121.60.

Foreign Institutional Investors sold equities worth ₹438.90 crore on Friday, according to exchange data.