Rupee Rises To RS 85.59 On US-India Trade Optimism Despite Market Slump

Forex traders said the Indian rupee ended the day in green against the US dollar amid firm expectations that India and the US will reach a deal soon.

On Wednesday, the rupee closed flat at 85.73 against the US dollar on Wednesday

Source : Starline/Freepik

The rupee pared initial gains and settled for the day higher by 4 paise at 85.69 (provisional) against the US dollar on Thursday, supported by US-India trade deal optimism, even as domestic equity markets were closed in the negative territory.

Forex traders said the Indian rupee ended the day in green against the US dollar amid firm expectations that India and the US will reach a deal soon.

At the interbank foreign exchange, the rupee opened on a positive note at 85.62 against the US dollar, and traded in a range of 85.69 and 85.53 during the day. The local unit finally settled for the day at 85.69 (provisional), up 4 paise from its previous close.

On Wednesday, the rupee closed flat at 85.73 against the US dollar on Wednesday.

According to a government official, an Indian commerce ministry team will soon visit Washington for another round of talks on the proposed trade agreement with the US to iron out differences in sectors like agriculture and automobiles.

The dates for the US visit have not been finalised yet. However, the team is expected to visit Washington next week.

We are not differentiating between an interim or the first phase of the bilateral trade agreement. We are negotiating a complete deal. Whatever will be finished, we can package it as an interim deal and for the rest, talks will continue :  the official said.

This visit is significant as the US has further extended the imposition of additional import duties (in the case of India, it is 26 per cent) till August 1. India is seeking the removal of this additional tariff.

India is also seeking the easing of tariffs on steel and aluminium (50 per cent) and the auto (25 per cent) sectors. Against these, India has reserved its right under the WTO (World Trade Organization) norms to impose retaliatory duties.

Meanwhile, Brent crude, the global oil benchmark, fell 0.34 per cent to USD 69.95 per barrel in futures trade.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.15 per cent to 97.41.

On the domestic equity market front, the Sensex dropped 345.80 points or 0.41 per cent to settle at 83,190.28, while the Nifty lost 120.85 points or 0.47 per cent to close at 25,355.25.

Foreign institutional investors (FIIs) purchased equities worth Rs 77 crore on a net basis on Wednesday, according to exchange data. 

(This report is published as part of auto generated syndicate wire feed.Apart from the headline no other editing has been done in the copy by ABP Live.)