US-China trade concerns and foreign fund outflows weighed on the domestic currency.
Mumbai: The rupee appreciated marginally by 9 paise to 70.25 against the US dollar in opening trade Thursday, driven by weakening of the greenback in overseas markets and positive opening in domestic equities.
Forex dealers said, weakening of the American currency in the overseas markets supported the rupee, while rising crude prices, US-China trade concerns and foreign fund outflows weighed on the domestic currency.
The rupee opened at 70.26 at the interbank forex market, and touched a high of 70.25, displaying gains of 9 paise over its last close.
The local unit however, pared some gains and was trading at 70.28 at 0957 hrs. The rupee on Wednesday had appreciated 10 paise and closed at 70.34 against the US dollar.
Meanwhile, foreign institutional investors net sold equities worth Rs 1,142.44 crore on Wednesday, provisional data available with stock exchanges showed. Brent crude futures, the global oil benchmark, rose 0.57 per cent to USD 72.18 per barrel.
Domestic equity benchmarks BSE Sensex and NSE Nifty started on a tepid note Thursday. The 30-share index was trading 8.25 points, or 0.02 per cent, higher at 37,123.13. The broader NSE Nifty was also trading 2.05 points, or 0.02 per cent, up at 11,159.05.
On the global front, President Donald Trump has signed an executive order barring American companies from installing the foreign-made telecom equipment deemed a national security threat, a move apparently aimed at banning Chinese giant Huawei from US networks.
The decision taken on Wednesday risks escalating tensions with China as the world's two largest economies clash over whether Huawei — the world's largest provider of telecommunications equipment — poses a spying risk to Western infrastructure networks.