The rupee depreciated 3 paise to 83.27 against the US dollar in the morning session on Wednesday, tracking a strong American currency overseas and muted trend in domestic equities.

Persistent foreign fund outflows also weighed on the local unit, forex traders said.

At the interbank foreign exchange, the rupee opened at 83.26 against the dollar. It touched a low of 83.27 in initial deals, registering a fall of 3 paise over its previous close.

On Tuesday, the rupee settled at 83.24 against the American currency.

In October, the USD/INR pair exhibited an unusual trend, with the lowest monthly intraday trading range observed recently. For most of the month, except for a few sessions, the interbank rate remained close to 83.25, varying just by one or two paise above or below, CR Forex Advisors MD-Amit Pabari said.

This apparent stability stands out, given the backdrop of significant global events, such as the Israel-Palestine conflict, a strong US Dollar Index (US DXY), and elevated US 10-year bond yields, among others.

"It's essential to remember that lower volatility often signals a contrary opinion, indicating the potential for increased volatility in the near future," Pabari added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 106.70, higher by 0.04 per cent.

Global oil benchmark Brent crude futures declined 0.05 per cent to USD 87.41 per barrel.

On the domestic equity market front, BSE Sensex was trading 64.82 points or 0.10 per cent lower at 63,810.11 points, while the broader NSE Nifty declined 5.30 points or 0.03 per cent to 19,074.30 points.

Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 696.02 crore, according to exchange data.

On the domestic macroeconomic front, the growth of eight key infrastructure sectors slowed down to a four-month low of 8.1 per cent in September 2023 against 8.3 per cent a year ago, according to the official data released on Tuesday.

The central government's fiscal deficit touched 39.3 per cent of the full-year target in the first half of the current financial year, slightly higher than 37.3 per cent recorded in the year-ago period.

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