Rupee opens flat at 85.4875/USD as dollar index trades lower

The local currency opened at 85.4875 against the US dollar, marginally stronger than its previous close of 85.4900.

The Indian rupee opened flat on June 30, tracking a softer US dollar amid renewed optimism over trade ties between the United States and China.

The local currency opened at 85.4875 against the US dollar, marginally stronger than its previous close of 85.4900.

The stability in the rupee comes after China confirmed on June 27 that it had reached a trade agreement with the United States. China’s Ministry of Commerce announced the deal during a press briefing in Beijing, outlining key provisions of the framework.

According to the ministry’s statement, China will “review and approve export applications for controlled items in line with laws and regulations,” while the US is expected to “lift a series of restrictive measures” against Chinese entities.

The positive development weighed on the dollar index (DXY), which slipped to 97.203 in early morning trade today, down from 97.401 at the previous close.

“Rupee is supported by foreign institutional investor (FII) inflows, gains in domestic equities, and easing crude oil prices,” said Kunal Sodhani, Head of Treasury at Shinhan Bank. “The DXY remains near a three-year low amid Trump’s criticism of the Federal Reserve and soft US GDP data, fueling expectations of a rate cut.”

Sodhani also noted that China’s manufacturing activity contracted for a third consecutive month in June, adding to the case for policy easing globally.

“For USD/INR, 85.20 acts as a key support, while 85.90 is seen as the immediate resistance level,” he added.