Rupee weakens to 94.55 as dollar strengthens in early trade

The rupee opened at 94.36 at the interbank foreign exchange market before declining to 94.55 against the US dollar, marking a loss of 9 paise from Wednesday's closing level of 94.46. The currency movement reflected broad-based strength in the dollar across overseas markets, according to forex traders monitoring the session.

Despite the depreciation, the rupee's downside was cushioned by a positive sentiment in domestic equities and easing international crude oil prices, both factors that typically support the Indian currency. The rupee had posted gains in the previous session, closing 29 paise higher on Wednesday after two consecutive days of strength.

Market analysts attributed recent currency movements partly to shifting geopolitical assessments. According to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, forward-looking markets are reducing the risk premium associated with the US-Israel conflict with Iran, as expectations of a Democratic-controlled Congress limiting military funding and prioritizing diplomatic talks gain traction.

The rupee's performance remains sensitive to movements in the dollar index, which tracks the greenback's value against a basket of major currencies, alongside domestic economic indicators and global commodity price movements.