Rupee slips 16 paise to 75.35 against US dollar in early trade

The rupee opened at 75.33 at the interbank forex market, then lost ground and touched 75.35 against US dollar, down 16 paise over its last close.

It had settled at 75.19 against the US dollar on Monday.

Forex traders said steady crude oil prices and foreign fund inflows supported the rupee, while factors like strong dollar, negative domestic equities and rising COVID-19 cases dragged the local unit down.

Moreover, investor sentiment weakened after India's June Consumer Price Index (CPI) breached Reserve Bank of India's tolerance band of 6 per cent, traders said.

Retail inflation increased to 6.09 per cent in June, mainly on account of higher prices of food items, government data showed on Monday.

Food inflation in June increased by 7.87 per cent, according to the CPI data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.11 per cent to 96.56.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 276.12 points lower at 36,417.57 and broader NSE Nifty fell 80.90 points to 10,721.80.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 221.76 crore on Monday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 2.01 per cent to USD 41.86 per barrel.

Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.30 crore and the death toll has topped 5.72 lakh.

In India, the death toll due the disease rose to 23,727 and the number of infections crossed 9-lakh mark, according to the health ministry.