Rupee Rises 4 Paise to Close at 85.69 Amid US-India Trade Deal Optimism

Mumbai, July 10: The Indian rupee ended 4 paise higher at 85.69 (provisional) against the US dollar on Thursday, supported by growing optimism surrounding an impending India-US trade deal. The gains came even as domestic equity markets closed lower.

At the interbank foreign exchange market, the rupee opened at 85.62 against the US dollar and moved in a range of 85.53 to 85.69 during the session. It eventually settled at 85.69, up from its previous close of 85.73.

Forex traders attributed the modest appreciation in the rupee to positive sentiment driven by ongoing negotiations between India and the US for a comprehensive trade agreement. The talks are expected to cover key sectors including agriculture, steel, aluminium, and automobiles.

Indian Trade Delegation to Visit Washington

According to government sources, a team from the commerce ministry is set to visit Washington next week to advance trade discussions. While the exact dates are yet to be finalised, officials confirmed that the visit aims to finalise a broad trade package.

“We are negotiating a complete deal. Whatever gets finalised can be packaged as an interim agreement, while negotiations will continue for the remaining aspects,” a government official said.

The diplomatic push takes added significance as the US has extended its additional 26% import duties on Indian goods until August 1. It is essential to note that India is advocating for the reduction of these tariffs and the withdrawal of high duties on steel (50%) and aluminium (25%), as well as automobiles (25%); it has retained its right to impose retaliatory duties in accordance with WTO norms.

Market and Global Cues

On the commodities front, Brent crude slipped 0.34% to trade at $69.95 per barrel.

The US dollar weakened globally, with the dollar index falling 0.15% to 97.41 against a basket of six major currencies.

Meanwhile, the domestic equity markets ended in the red. The BSE Sensex fell 345.80 points or 0.41% to 83,190.28, while the NSE Nifty declined 120.85 points or 0.47% to 25,355.25.

Foreign institutional investors (FIIs) were net buyers, investing Rs 77 crore in Indian equities on Wednesday, as per exchange data.

Outlook

A marginal improvement in the rupee reflects some optimism regarding a trade deal between India and the US despite weak equity markets. With negotiations ongoing and the US dollar continuing to weaken globally, there may be some support for the rupee in the short term.

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