The rupee opened on a flat note and appreciated 3 paise to 73.14 against the U.S. dollar in opening trade on Wednesday tracking most Asian currencies amid concerns about more lockdowns in major economies.
At the interbank forex market, the domestic unit opened at 73.16 against the U.S. dollar and inched higher to 73.14 against the greenback, registering a rise of just 3 paise over its previous close.
On Tuesday, the rupee depreciated 15 paise to settle at 73.17 against the US dollar.
ADVERTISEMENT
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.06% to 89.48.
"Rising COVID-19 infections could push investors towards the safe haven appeal of the U.S. dollar and cap gains for the domestic unit," Reliance Securities said in a research note.
However, foreign portfolio investor (FPI) flows into the domestic equity markets could cap losses, it added.
ADVERTISEMENT
Further, most Asian currencies were weak against the greenback this morning and could weigh on sentiments, traders said.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 33.65 points lower at 48,404.13, and the broader NSE Nifty was down 10.20 points at 14,189.30.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth ₹ 986.30 crore on a net basis on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.52% to USD 53.88 per barrel.