File photo for representational purpose.
Credit: Reuters Photo
Mumbai: The rupee gained 17 paise to trade at 91.41 against the US dollar in early deals on Friday, as investor sentiments improved after US President Donald Trump stepped back from tariff threats against Europe linked to Greenland, easing immediate trade-war fears.
Forex traders said Trump's softer rhetoric reduced near-term geopolitical anxiety. Moreover, as investors' risk appetite improved, the dollar corrected, allowing emerging market currencies -- including the rupee -- to recover slightly, they said.
At the interbank foreign exchange, the rupee opened at 91.45 then gained ground to trade at 91.41 against the greenback, up 17 paise from its previous close.
On Thursday, the rupee rebounded from its all-time low levels and ended with a gain of 7 paise at 91.58 against the US dollar.
Forex traders, however, said the currency remains under severe pressure from persistent foreign fund outflows amid heightened global geopolitical uncertainties.
The pending trade agreement with the US remains a key stabilising factor. Until the geopolitical risk eases and the trade deal materialises, the rupee is likely to remain vulnerable to external shocks, they said.
At current levels, a large portion of global risk appears to be priced into the rupee. This opens the door for a phase of consolidation and a possible partial recovery if risk sentiment stabilises, they added.
"The 92.00 level remains a strong resistance, while sustained RBI support could guide USD/INR back toward the 90.50–90.70 zone in the near term," CR Forex Advisors MD Amit Pabari said in a research note.
Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was trading 0.01 per cent higher at 98.36.
Brent crude, the global oil benchmark, was trading 0.87 per cent higher at USD 64.62 per barrel in futures trade.
On the domestic equity market front, Sensex fell 25.99 points to 82,281.38 in initial trade, while the Nifty rose 10.55 points to 25,300.45.
Foreign institutional investors offloaded equities worth Rs 2,549.80 crore on Thursday, according to exchange data.