Forex traders said rupee traded in a volatile but narrow range as market participants stayed on the sidelines, waiting for clarity on the US-India interim trade deal.
At the interbank foreign exchange, the rupee opened at 85.62 against the dollar, then touched an early high of 85.56, up 17 paise from its previous close.
On Wednesday (July 9), the rupee closed flat at 85.73 against the US dollar.
”On the positive side, US-India trade talks made modest progress, with tariff deadline extensions on select Indian exports offering short-term relief. This supports the rupee as India was excluded from the US tariff hike letters,” CR Forex Advisors MD Amit Pabari said.
The US has issued tariff letters to about 20 countries so far. But India, which is negotiating a trade pact with the US, has not figured in the list of countries that have been issued tariff letters by the Trump administration.
On April 2, the US imposed an additional 26% reciprocal tariff on Indian goods but suspended it for 90 days till July 9. Now, it has been deferred to August 1.
However, the 10% baseline tariff imposed by America remains in place.
The US is India’s largest trading partner from 2021-22. During 2024-25, the bilateral trade in goods stood at $131.84 billion ($86.51 billion worth of exports, $45.33 billion of imports and $41.18 billion trade surplus).
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.19% to 97.37.
Brent crude, the global oil benchmark, fell 0.03% to $70.17 per barrel in futures trade.
”Brent crude prices rose to $70 barrel. For a net oil importer like India, this poses a short-term threat to the trade balance as rising crude typically means higher import bills and a heavier current account, putting additional pressure on rupee,” Pabari added.
Meanwhile, in the domestic equity market, the Sensex declined 113.57 points or 0.14% to 83,422.51, while Nifty fell 37.00 points or 0.15% to 25,439.10.
Foreign institutional investors (FIIs) purchased equities worth ₹77 crore on a net basis on Wednesday, according to exchange data.