Rupee opens 18 paise down at 86.84 as dollar index surges

Indian rupee

The rupee opened 18 paise down on July 29 after the dollar index surged on trade relief.

The currency opened at 86.83 against the US dollar after ending the previous day at 86.65.

The dollar index, which measures the greenback's strength against a basket of six major currencies, rose to 98.64 in early morning trade from below 97 levels in the previous session.

"The dollar surged on the trade relief after suffering a month long pummelling due to trade-war anxiety but now, even as Washingtons biggest tariff battle moves into rear view, relief for the battered currency is not likely as a potentially less hawkish Fed Reserve has now become a main threat," said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.

On July 27, US President Donald Trump announced a trade deal with European Union after the European Commission president Ursula von der Leyen travelled to Scotland for talks with the American leader to push the long-drawn deal over the line.

"We have reached a deal. It's a good deal for everybody," Trump told reporters after talks with von der Leyen at his golf resort in Turnberry, Scotland. The EU chief also hailed it the "good deal".

For the day, the rupee is likely to trade in the 86.25–86.90 range, Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities, said.