Rupee Appreciates to Rs 85.80 Against the Dollar in Early Trade Today

Mumbai, 17 July 2025: The Indian rupee appreciated by 12 paise to 85.80 against the US dollar in early trade on Thursday. The rise was supported by declining global crude oil prices and growing optimism around the ongoing India-US trade discussions. Despite a strong dollar index and continued foreign outflows, the rupee managed to gain ground compared to its previous close of 85.92.

Softer Crude Prices and Trade Optimism Boost Rupee’s Early Momentum

At the interbank foreign exchange market, the rupee opened slightly weaker at 85.93, but quickly recovered to 85.80, driven by favourable external factors. Forex analysts pointed to declining global oil prices and the anticipation of a breakthrough in bilateral trade negotiations with the US as the main reasons behind the upward movement. However, a firm US dollar and sustained foreign institutional investor (FII) outflows limited the extent of the gain.

India-US Trade Talks Reach Final Day, Market Eyes Potential Breakthrough

A delegation from India’s Commerce Ministry is currently in Washington for a four-day negotiation round on a proposed trade pact. The discussions, which began on Monday, are set to conclude today.

Expectations rose further after US President Donald Trump stated that the potential agreement with India could be on par with the recent trade deal signed with Indonesia, signalling possible positive outcomes. The currency and equity markets are closely watching the developments, anticipating clarity and potential policy shifts.

Decline in Brent Crude Offers Relief, but Dollar Index Keeps Pressure On

Brent crude futures fell 0.36% to USD 68.46 per barrel, providing a cushion for the rupee. The drop in prices came after a recent surge caused by a larger-than-expected drawdown in US crude inventories, highlighting ongoing tightness in global supply.

Meanwhile, the US dollar index, which tracks the greenback against six major global currencies, rose 0.17% to 98.55, continuing to exert downward pressure on emerging market currencies like the rupee.

Domestic Equities Open Higher Despite FII Outflows

India’s equity markets opened on a positive note. The Sensex gained 119.05 points, reaching 82,753.53, while the Nifty rose 18.7 points to 25,230.75 during early trade on Thursday. The rise reflects market confidence amidst global trade optimism.

However, institutional data from Wednesday showed that FIIs were net sellers, withdrawing ₹1,858.15 crore from Indian equities, signalling cautious sentiment among global investors despite the domestic currency’s recovery.

The rupee’s early gain reflects a delicate balance between external support from trade and energy markets and internal pressure from persistent capital outflows. As talks in Washington conclude today, currency and equity markets will closely monitor the outcomes for further cues.

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