Indian rupee depreciated by 13 paise to 73.15 per US dollar on Tuesday's opening trade, tracking the muted opening in domestic equities.
The domestic unit was trading in a narrow range. It opened at 73.02 against the US dollar at the interbank forex market and later fell to 73.15 against the greenback, registering a fall of 13 paise over its previous close.
On Monday, the rupee appreciated by 9 paise to close at a four-month high of 73.02 against the US dollar. Positive domestic equities and news on COVID-19 vaccine also improved sentiments.
Meanwhile, the dollar index fell 0.12 per cent to 89.76 against a basket of six currencies.Traders said market participants remained cautious ahead of the outcome over the runoff elections in Georgia that will determine control of the US Senate.
Further, investors will also await the outcome of the minutes of the December Federal Reserve meeting, the US ISM manufacturing and non-manufacturing data and the US monthly jobs report.
Reliance Securities said in a research note,"Uncertainty surrounding Georgia run-offs and rising COVID-19 infections could push investors towards the safe haven appeal of the US dollar and cap gains for the domestic unit. Most Asian currencies were flat against the greenback this Tuesday morning."
Abhishek Goenka, Founder and CEO, IFA Global said," The UK has issued stay-at-home orders for citizens as it goes into a lockdown which is expected to last until mid-February. The Sterling fell about 150 pips overnight from close to 1.37."
On the domestic equity market front, market indices reversed trend today and turned bearish after nine sessions of straight gains on Tuesday, in line with weak global equities. Sensex traded 100 points lower at 48,037 and Nifty fell by 57 points to 14,032.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,843.22 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 715.21 crore in the Indian equity market on 4 January, provisional data showed.
Brent crude futures, the global oil benchmark, fell 0.18 per cent to USD 51.00 per barrel. Oil price fell from highs as US stocks saw pull back from record highs on concerns over runoff election in Georgia. Also, OPEC+ could not decide whether to increase output in Feb.