Rupee rises 7 paise to close at 87.86 against US dollar

The rupee appreciated by seven paise to close at 87.86 (provisional) against the US dollar on Thursday, supported by a positive trend in domestic equities and risk-on sentiments amid optimism about the US-India trade deal.

Forex traders said the rupee closed on a positive note as there is a growing buzz that India and the US are inching closer to finalizing a long-awaited trade deal.

At the interbank foreign exchange, the rupee opened at 87.80 and touched an intraday low of 87.96 before settling at 87.86 (provisional), registering a rise of 7 paise from its previous close.

On Monday, the rupee had settled nine paise higher at 87.93 against the greenback.

Foreign exchange markets were closed on Tuesday and Wednesday due to Diwali and Diwali Balipratipada, respectively.

According to forex traders, investors will watch global cues, US economic data and RBI monetary signals for further directions.

Meanwhile, Prime Minister Narendra Modi and US President Donald Trump discussed trade issues during a phone conversation amid efforts by the two sides to repair bilateral ties that remain under strain after Washington slapped a whopping 50% tariff on Indian goods.

In his remarks following the call on Tuesday, Trump described the India-US relationship as "great" and said, without elaborating, that the two sides are working on some "great deals".

Moreover, Trump has reiterated his claim that India has agreed to "stop" buying oil from Russia and would bring them down to "almost nothing" by the end of the year.

However, he said, it is a process and will take some time.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.14% higher at 99.04.

Brent crude, the global oil benchmark, was trading higher by 5.32% at $65.92 per barrel in futures trade.

On the domestic equity market front, Sensex climbed 130.06 points to settle at 84,556.40, while the Nifty rose 22.80 points to 25,891.40.

Foreign Institutional Investors purchased equities worth ₹96.72 crore on Tuesday, according to exchange data.