Rupee gains 1 paisa to 87.30 against US dollar in early trade

The rupee turned almost flat and gained 1 paisa to 87.30 against the US dollar in early trade on Tuesday on the back of weaker American currency and lower level of crude oil prices.

However, volatile domestic equity markets amid fear of recession in the US and trade-related uncertainties impacted investor sentiment adversely, forex traders said.

At the interbank foreign exchange, the rupee opened at 87.37, slipped to 87.39 and then slightly strengthened to 87.30 against the greenback in early deals, registering a gain of 1 paisa from its previous closing level.

On Monday, the rupee sank 36 paise to close at 87.31 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.20 per cent at 103.75.

Brent crude, the global oil benchmark, rose 0.01 per cent to USD 69.29 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 424.36 points, or 0.57 per cent, lower at 73,690.81 points, while the Nifty was down 117.90 points, or 0.52 per cent, at 22,342.40 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 485.41 crore on a net basis on Monday, according to exchange data.

On the global macroeconomic front, US President Donald Trump has sought to downplay business concerns over the uncertainty caused by his tariff moves and did not rule out the possibility of a recession triggered by higher prices in the country.

Meanwhile, China has retaliated against Trump's 20 per cent tariff of Chinese imports with an additional 15 per cent tax on key American farm products, including chicken, pork, soybeans and beef. The escalating trade tensions led to a crash in the US markets on Monday.