Mumbai, May 6 (PTI) The rupee traded in a narrow range in morning trade on Tuesday and fell 8 paise to 84.38 against the US dollar tracking the rise in the dollar index and fall in Asian currencies, amid growing uncertainty and a cautious recalibration of risk appetite.

According to forex traders, the USD/INR pair was supported by an overall decline in crude oil prices and sustained foreign fund inflows while ongoing geopolitical tensions between India and Pakistan weighed on investor sentiment, keeping the rupee on edge.

At the interbank foreign exchange, the domestic unit opened at 84.28 and fell to an early high of 84.26 and a low of 84.38 against the greenback, registering a loss of 8 paise over its previous close.

On Monday, the rupee surged 27 paise to settle at 84.30 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.03 per cent at 99.79.

Brent crude, the global oil benchmark, rose 1.53 per cent to USD 61.15 per barrel in futures trade.

According to traders, markets are now grappling with the realisation that Donald Trump’s policy volatility could resurface at any moment, shaking any fragile sense of calm and this shift in sentiment has prompted a flight to safety.

President Trump's abrupt announcement of a 100 per cent tariff on all foreign-made movies has shifted investor focus, not because of its direct economic impact, but because of what it signals -- renewed unpredictability at the top, CR Forex Advisors MD Amit Pabari said.

The rupee is supported by positive signals surrounding a potential US-India trade deal and the recent OPEC+ decision to increase oil output for the second consecutive month.

The Organisation of the Petroleum Exporting Countries Plus (OPEC+) is a coalition of 12 OPEC members and 10 major non-OPEC oil-exporting nations.

For an oil-importing nation like India, this development is a welcome relief and reduces external pressure on the rupee, Pabari noted.

"Given the crosscurrents, USD/INR is expected to remain volatile. Near-term support lies around 83.75, with upward potential toward 84.80 and possibly 85.20, depending on how the global narrative unfolds in the days ahead," he said.

In the domestic equity market, the 30-share BSE Sensex declined 73.60 points, or 0.09 per cent, to 80,723.24, while the Nifty fell 20.55 points, or 0.08 per cent, to 24,440.60.

Foreign institutional investors (FIIs) bought equities worth Rs 497.79 crore on a net basis on Monday, according to exchange data. PTI DRR DR

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Rupee falls 8 paise to 84.38 against US dollar in early trade

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