The rupee was trading in a narrow range against the U.S. dollar in early trade on May 10, as the support from positive domestic equities was negated by elevated crude oil prices.
Forex traders said the strength of the American currency in the overseas market and significant foreign fund outflows dented investors' sentiments.
At the interbank foreign exchange market, the local unit opened at 83.48, it touched 83.46 in the initial trade, registering a gain of 2 paise from its previous close.
On May 9, the rupee closed at 83.48 against the American currency.
"The Indian Rupee was again sold-off on May 9 as FPIs outflows continued to trigger demand for the U.S. dollar, while probable RBI selling at 83.50 did not allow a higher up move on the USD/INR pair. On May 10 also the same is expected from the USD/INR pair with RBI continuing its control at 83.50," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 105.30, higher by 0.07%.
Brent crude futures, the global oil benchmark, rose 0.5% to $84.34 per barrel.
On the domestic equity market, the 30-share BSE Sensex was trading 169.82 points, or 0.23% higher at 72,573.99 points. The broader NSE Nifty was up 67.05 points, or 0.31%, to 22,024.55 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 9 as they offloaded shares worth ₹6,994.86 crore, according to exchange data.
"FPIs offloaded ₹22,858 crore in six market sessions in May 2024, while DIIs (Domestic Institutional Investors) were buyers to the tune of ₹16,700 crore. Uncertainty in election results and higher U.S. treasury yields were the main causes of this sell-off," Mr. Bhansali added.
