Rupee depreciates 16 paise to close at ₹88.66 against US dollar

The rupee depreciated 16 paise to close at ₹88.66 (provisional) against the US dollar on Wednesday, weighed down by the strength of the American currency in the overseas market and elevated crude oil prices.

Forex traders said the rupee traded within a range as renewed optimism over the India-US trade deal and rising hopes that the government shutdown could end soon supported the domestic unit at lower levels.

At the interbank foreign exchange, the rupee opened at ₹88.61 against the US dollar and touched an intra-day high of ₹88.56 and a low of ₹88.66 during the day.

The domestic unit finally settled for the day at ₹88.66 (provisional), registering a loss of 16 paise from its previous close.

On Tuesday, the rupee had settled at ₹88.50 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.15% higher at 99.58, on optimism that the US government shutdown will end soon.

The Senate has approved a bill to end the shutdown, and the House of Representatives could vote on it as early as Wednesday.

Brent crude, the global oil benchmark, was trading 0.36% higher at USD 64.28 per barrel in futures trade.

Moreover, the optimism over a nearing US trade deal supported the local unit, they said.

The US is "pretty close" to reaching a "fair trade deal" with India, President Donald Trump has said, adding that he will lower the tariffs imposed on Indian goods at "some point".

This is the second time in less than two weeks that the US president held out hope to seal the proposed bilateral trade deal with India.

On the domestic equity market front, the Sensex jumped 595.19 points to settle at 84,466.51, while the Nifty climbed 180.85 points to 25,875.80.

Foreign Institutional Investors sold equities worth ₹803 crore on Tuesday, according to exchange data.