Rupee rises 21 paise to 85.34 against US dollar in early trade

Mumbai: The rupee appreciated 21 paise to 85.34 against the US dollar in early trade on Friday as Asian currencies, including the rupee gained ground on renewed hopes of trade deals with the US.

Forex traders said, US President Donald Trump announced a trade agreement with Vietnam, and that injected a dose of optimism that perhaps more such agreements could be in the pipeline before the crucial July 9 deadline.

The optimism spilled over into broader Asian forex sentiment, giving the rupee some fresh momentum.

At the interbank foreign exchange, the domestic unit opened at 85.44 against the greenback. In initial trade, it witnessed a high of 85.34, registering a rise of 21 paise over its previous close.

On Thursday, The rupee pared initial losses and edged up 7 paise to close at 85.55 against the dollar.

"With the July 9 tariff deadline drawing near and President Trump's "One Big Beautiful Bill" looming in the background, markets are on edge. The rupee is expected to find solid support near 85.20 and trade in a broad range, with resistance likely around 86.20–86.40," CR Forex Advisors MD - Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.20 per cent to 96.98.

Brent crude, the global oil benchmark, fell 0.38 per cent to USD 68.54 per barrel in futures trade.

"Brent crude has started inching higher once again, currently hovering around USD 68.20 per barrel. For India, a net oil importer, rising crude prices pose a near-term threat to the trade and current account balances," Pabari added.

Meanwhile, in the domestic equity market, the Sensex declined 25.10 points or 0.03 per cent to 83,214.37, while Nifty fell 7.70 points or 0.03 per cent to 25,396.50.

Foreign institutional investors (FIIs) offloaded equities worth Rs 1,481.19 crore on a net basis on Thursday, according to exchange data.

On the domestic macroeconomic front, the Indian services sector growth touched a ten-month high in June aided by robust expansion in international sales and job creation, amid positive demand trends and ongoing improvement in sales, a monthly survey said on Thursday.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 58.8 in May to 60.4 in June, driven by sharp upturn in new business orders.