The rupee fell 6 paise to 90.62 against the US dollar in early trade

The rupee devalued by 6 paise to 90.62 against the US dollar in early trade on Wednesday as geopolitical tensions and demand for the dollar from importers weighed on investor sentiment. At the interbank forex market, the rupee opened at 90.56 against the US dollar but subsequently lost some ground to settle at 90.62, posting a loss of 6 paise against the previous close.

In the first trade, the rupee also traded at 90.46 against the US currency.On Tuesday, the rupee pared initial losses and closed on a positive note, higher by 10 paise at 90.56 against the US dollar.

Forex traders said that while markets initially welcomed the India-US trade deal, new concerns have arisen after the White House released its fact sheet.

The fact sheet highlights key terms of the agreement, including that India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products.

This includes distiller’s dried grains, red sorghum, nuts, and fresh and processed fruits. Certain legumes, soybean oil, wine and spirits and complementary products, and India has committed to buying more U.S. products and more than $500 billion worth of U.S. energy, information and communications technology, agricultural, coal and other products. “The US document goes a step further than the February 6 joint statement by explicitly mentioning tariff cuts on additional US agricultural products, including certain pulses. This is a sensitive area for India – both politically and economically,” CR Forex Advisors MD Amit Pabari said in a note.

Pabari said, “In the near term, the 90.00-90.20 zone continues to act as a strong support for the rupee. As long as this area remains intact, USD/INR could slowly move higher with the 91.00-91.20 range emerging as the next potential upside zone in the coming sessions.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.14 percent lower at 96.66.

Brent crude, the global oil benchmark, was 0.78 percent higher at $69.34 per barrel in futures trading.

For India, as a major oil-importing country, higher crude oil prices mean a higher import bill. And a heavier import bill almost always translates into pressure on the rupee, even if the impact is gradual, Pabari said.

In the domestic equity market, Sensex rose 141.21 points to 84,415.13 in early trade, while Nifty rose 51.95 points to 25,987.10.

Foreign institutional investors bought shares worth Rs 69.45 crore on Tuesday, according to stock market data.