The Indian rupee traded on a cautious note in early trade on Wednesday (March 12), edging down by 1 paisa to 87.22 against the US dollar amid market volatility driven by trade tariff uncertainties.

Forex analysts attributed the rupee's subdued movement to a stronger US dollar index and a rebound in crude oil prices, adding to the pressure from foreign capital outflows and weakness in domestic equities. Investors remained watchful ahead of key macroeconomic data releases in India and the US later in the day.

At the interbank foreign exchange, the rupee opened at 87.24, slipped to 87.32, and later regained ground to trade at 87.22 against the greenback, marginally lower than its previous close, news agency PTI reported.

On Tuesday, the rupee had gained 10 paise to settle at 87.21 after a sharp 36-paise decline the previous day.

Meanwhile, the dollar index, which measures the US currency's strength against a basket of six major currencies, rose 0.07% to 103.55. Brent crude futures also saw an uptick, climbing 0.66% to trade at $70.02 per barrel.

In the domestic equity market, trading remained lacklustre. The benchmark BSE Sensex dipped slightly by 0.28 points to 74,102.04, while the broader NSE Nifty slipped 10.70 points, or 0.05%, to 22,487.20.