Rupee slips 4 paise against US dollar in early trade

Mumbai: The Indian rupee opened on a cautious note and fell 4 paise to 71.78 against the US dollar in early trade on Monday as economic growth concerns and rising crude oil prices kept investors edgy.

Forex traders said investors traded the cautious path after India's Q2 GDP growth dipped to over 6-yr low of 4.5 per cent.

India's GDP growth hit an over six-year low of 4.5 per cent in July-September 2019, dragged mainly by deceleration in manufacturing output and subdued farm sector activity, according to official data released on Friday.

At the interbank foreign exchange, the rupee opened weak at 71.78 against the US dollar, showing a decline of 4 paise over its previous closing.

The Indian rupee on Friday had closed at 71.74 against the US dollar.

The rupee, however, pared initial losses and was trading at 71.69 against the US dollar at 0935 hrs.

Traders noted that the strengthening of the American dollar vis-a-vis other currencies overseas and sustained foreign fund outflows weighed on the domestic currency.

However, positive opening in domestic equities supported the rupee and restricted the fall.

Domestic bourses opened on a positive note on Monday with benchmark indices Sensex trading 142.28 points up at 40,936.09 and Nifty higer by 28.10 points at 12,084.15.

Meanwhile, foreign institutional investors (FIIs) sold shares worth Rs 1,892.29 crore on Friday, according to provisional exchange data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.04 per cent to 98.31.

Crude oil benchmark, Brent Futures, rose 1.26 per cent to USD 61.26 per barrel.

The 10-year government bond yield was at 6.46 per cent in morning trade.