Rupee rises 12 paise to 85.80 against US dollar in early trade

Mumbai: The rupee rose 12 paise to 85.80 against the US dollar in early trade on Thursday amid a drop in global crude oil prices and a hope of a breakthrough in the ongoing India-US trade talks.

However, a strengthening dollar against overseas currencies and FII outflows prevented sharper gains in the local unit, according to forex traders.

At the interbank foreign exchange, the rupee opened weaker at 85.93 against the US dollar but moved into positive territory to 85.80, up 12 paise from its previous close.

The rupee had declined 16 paise against the US dollar to close at 85.92 on Wednesday.

An Indian commerce ministry team is in Washington for another round of talks on the proposed bilateral trade agreement. The four-day talks, which started on Monday, will conclude on Thursday.

US President Donald Trump has said that the proposed trade deal with India would be on the lines of what America has finalised with Indonesia on Tuesday.

"The rupee in a volatile move moved from 86.06 to 85.73 and then closed at 85.92 on Wednesday as dollar index was up. For today (Thursday), rupee is expected to be in the range of 85.75/86.25 with RBI resisting the currency pair near to 86.00 level," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Brent crude, the global oil benchmark, was down 0.36 per cent to USD 68.46 per barrel in futures trade.

"Brent oil prices rose after US data showed a sharper-than-expected drop in crude inventories, highlighting tight supplies, while investors remained cautious ahead of potential US tariff announcements on 150 countries as part of his ongoing agenda prompting global efforts to avoid steeper import duties," Bhansali said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.17 per cent to 98.55.

On the domestic equity market front, the Sensex rose 119.05 points to 82,753.53 in opening trade, while Nifty was up 18.7 points to 25,230.75.

Foreign institutional investors (FIIs) sold equities worth Rs 1,858.15 crore on a net basis on Wednesday, according to exchange data.