The Indian rupee gained marginally on Wednesday, opening 5 paise stronger at 85.66 against the US dollar, buoyed by rising optimism that India and the United States may strike a trade agreement before the July 9 tariff deadline.
This minor uptick comes after the rupee closed at 85.7113 in the previous session. Analysts point to intensified last-minute efforts by Indian and US negotiators working around the clock to finalize a deal that would avert steep reciprocal tariffs threatened by Washington.
Investor sentiment received a further boost after US President Donald Trump announced a deal with Vietnam, reducing tariffs on several Vietnamese imports from a previously proposed 46% to 20%. Trump also claimed that US goods would enter Vietnam duty-free, although further details of the pact remain unclear.
The stakes remain high for India, as Trump’s “Liberation Day” reciprocal tariff policy, announced on April 2, includes a proposed 26% duty on Indian goods. However, the tariffs have been on a 90-day pause to allow room for diplomatic negotiations with multiple countries, including India.
Market experts expect volatility ahead of the July 9 deadline. “Today, the rupee will trade in the 85.35–85.95 range against the US dollar,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. “Upticks near 86 could be used to sell dollars, while any downtick toward 85.50 may be used to buy dollars,” he added.
While the currency’s movement remains modest, the market is watching closely for any signs of a finalized deal, which could bring clarity and stability to the rupee’s trajectory and offer relief to Indian exporters.