The rupee opened 8 paise up on July 18 after the dollar index eased amid better US retail sales data and job claims.
The currency opened at 85.99 against the dollar after ending the previous trading session at 86.07.
The dollar index, which measures the American currency against a basket of currencies, slipped to 98.42 in the morning trade. It closed the previous day at 98.73.
Retail sales in the US increased by a better-than-expected 0.6 percent in June, following a 0.9 percent decline in May and a 0.1 percent drop in April.
unemployment benefits declined for a fifth straight week to the lowest level since mid-April, showing a resilient job market.
First-time jobless claims decreased by 7,000 to 221,000 in the week ended July 12. The median forecast in a Bloomberg survey of economists called for 233,000 applications.
Continuing claims, a proxy for the number of people receiving benefits, were little changed at 1.96 million in the previous week that included Independence Day, labor department data released on July 17 showed.
"US retail sales data and jobless claims beats estimates, a sign that consumer spending has improved. The upside surprise in spending, despite tariff uncertainty and high interest rates, has provided a glimmer of hope for the US economy," said Kunal Sodhani, head of treasury at Shinhan Bank.
"For the near term, the spot USD/INR pair has a resistance level at 86.27 and a support level at 85.65," said Dilip Parmar, senior research analyst, HDFC Securities.
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