Rupee Edges Up 6 Paise to 85.67 on Trade Deal Hopes, Tariff Delay

Mumbai, July 9: The Indian rupee appreciated by 6 paise to end at 85.67 against the US dollar on Wednesday, due to different reasons, including a positive sentiment surrounding the ongoing trade deal negotiations with the US. A delay in the reciprocal tariff imposition has boosted investor sentiment and increased demand for emerging market assets, including the Indian Rupee.

As the tariffs are delayed, overall trade risks are reduced, thereby supporting risk-on sentiment and currency stability.

Rupee Rebounds Despite Dollar Strength

At the interbank foreign exchange market, the rupee opened on a weaker note at 85.84 and moved within a narrow range of 85.93 to 85.65 during the day. It ultimately closed at 85.67 (provisional), slightly stronger than Tuesday’s closing of 85.73, when it had surged 21 paise.

The recovery comes amid cautious optimism as investors eye developments in trade talks with the US, which appear to have reduced near-term pressure on the currency.

Limited Upside as Crude Prices and Dollar Remain Firm

Despite the gain, the rupee’s upward momentum was capped by a firm US dollar overseas and Brent crude prices hovering around USD 70 per barrel. The dollar index inched up 0.03% to 97.02, reflecting underlying strength in the U.S. dollar.

Brent crude futures also edged higher by 0.33% to USD 70.38, putting some pressure on the rupee given India’s import dependence on oil.

Market Outlook: Rupee Seen in 85.30-86.20 Band

According to Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, the rupee showed resilience after opening near 85.90, buoyed by relief from trade tensions and the deferred tariffs. He noted that the rupee is likely to trade between 85.30 and 86.20 in the near term.

Domestic Market Snapshot

On the equity front, Indian benchmarks ended lower with the BSE Sensex falling 176.43 points to 83,536.08, while the NSE Nifty dropped 46.40 points to close at 25,476.10.

Meanwhile, foreign institutional investors (FIIs) offloaded shares worth Rs 26.12 crore on Tuesday, according to exchange data, adding to the cautious sentiment in the broader market.

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