Mumbai, Sep 11 (PTI) The rupee depreciated 5 paise to 88.16 against the US dollar in early trade on Thursday, as market participants are keenly awaiting cues from the trade talks between India and the US.
Forex traders said the rupee held its ground supported in part by renewed talk of an India-US trade deal and the rupee is expected to trade within a narrow band of 87.50-88.40 in the near term.
At the interbank foreign exchange market, the rupee opened at 88.11, then lost ground and touched an early low of 88.16 against the US dollar, registering a decline of 5 paise over its previous close.
On Wednesday, the rupee recovered slightly from its record low level and ended with a gain of 4 paise at 88.11 against the US dollar.
The Indian rupee has remained range-bound in the last few sessions, unable to cross 88.20 and 87.95 on the higher side as the market is keenly watching the Indian delegation back to the table with the US negotiators on the tariff issue, while the Reserve Bank of India keeps selling dollars quietly near the 88.20 level.
"For the day also we expect the range to be between 87.80 and 88.30. The market sentiment is also driven by anticipation of the upcoming CPI release and the expectations of a bigger size FED rate cut," Finrex Treasury Advisors LLP said in a research note.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.05 per cent to 97.82.
Brent crude, the global oil benchmark, was trading 0.10 per cent lower at USD 67.42 per barrel in futures trade,
On the domestic equity market front, Sensex climbed 153.82 points to 81,578.97 in early trade, while the Nifty was up 34.15 points to 25,007.25.
Foreign Institutional Investors offloaded equities worth Rs 115.69 crore on Wednesday, according to exchange data.
Meanwhile, India and the US are natural partners and teams from both sides are working to conclude negotiations on a bilateral trade deal, Prime Minister Narendra Modi said on Wednesday in response to US President Donald Trump's remarks that efforts are on to address "trade barriers" between the two countries.
The exchange between the two leaders on social media is largely seen as part of efforts by both New Delhi and Washington to reset ties that witnessed increasing stress in the last few weeks after Trump doubled tariffs on Indian goods. PTI DRR TRB
