Rupee rises 13 paise to 87.80 against US dollar in early trade

Mumbai: The rupee appreciated 13 paise to 87.80 against the US dollar in early trade on Thursday, supported by optimism on the US-India trade deal front.

Forex traders said foreign fund inflows, a positive trend in domestic equities and risk-on sentiments boosted investor sentiments.

At the interbank foreign exchange market, the rupee opened at 87.80 against the US dollar, registering a gain of 13 paise from its previous close.

On Monday, the rupee had settled 9 paise higher at 87.93 against the greenback.

Foreign exchange markets were closed on Tuesday and Wednesday due to Diwali and Diwali Balipratipada, respectively.

"The Indian rupee opened stronger after the optimism on the US-India trade deal as Trump said that India will slowdown on Russian oil buying and market expected a trade deal to be signed soon in which the tariffs on India will be lessened to 16 per cent from the existing 50 per cent," said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Prime Minister Narendra Modi and US President Donald Trump discussed trade issues during a phone conversation amid efforts by the two sides to repair bilateral ties that remain under strain after Washington slapped a whopping 50 per cent tariff on Indian goods.

In his remarks following the call on Tuesday, Trump described the India-US relationship as "great" and said, without elaborating, that the two sides are working on some "great deals".

Bhansali further added that market sentiment will, however, remain cautious as traders watch global cues, US economic data and RBI monetary signals for further directions.

US President Donald Trump has reiterated his claim that India has agreed to "stop" buying oil from Russia and would bring them down to "almost nothing" by the end of the year.

However, he said, it is a process and will take some time.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.15 per cent higher at 99.04.

Brent crude, the global oil benchmark, was trading higher by 2.64 per cent at USD 64.24 per barrel in futures trade.

On the domestic equity market front, Sensex jumped 734.36 points to 85,160.70 in early trade, while the Nifty surged 198.3 points to 26,066.90.

Foreign Institutional Investors purchased equities worth Rs 96.72 crore on Tuesday, according to exchange data.