The rupee fell 1 paisa to 83.38 against the US dollar in early trade on Wednesday, tracking a stronger American currency against major overseas rivals.

According to forex analysts, a steep fall in crude oil prices from above USD 76 per barrel to the level of USD 73 a barrel provided support, but the Indian currency was weighed down by the muted trend in equity markets on the back of rising retail inflation in the country.

At the interbank foreign exchange market, the local unit opened at 83.39 and gained slightly to trade at 83.38 against the greenback, down 1 paisa from its previous close.

On Tuesday, the domestic currency settled at 83.37 against the US dollar.

The government data released on Tuesday showed India's retail inflation rose to a three-month high of 5.55 per cent in November, though it remained within the RBI's comfort zone of less than 6 per cent.

Industrial production growth, however, accelerated to a 16-month high of 11.7 per cent in October, mainly due to double-digit growth in manufacturing, power and mining sectors' output, according to the official data released on Tuesday.

Currency traders were also awaiting the US Federal Reserve's monetary policy decision likely to be announced on Wednesday.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent higher at 103.48.

Brent crude futures, the global oil benchmark, declined 0.20 per cent to USD 73.09 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 20.84 points or 0.03 per cent lower at 69,530.19 points. The broader NSE Nifty inched up 5.15 points or 0.02 per cent at 20,911.55 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital market on Tuesday as they bought shares worth Rs 76.86 crore, according to exchange data.

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