Rupee gained 0.14 percent, or 0.121 paise, in the afternoon trade on April 8 as the currency dropped below 86 against US dollar to 85.985.
The market turmoil unleashed by the US reciprocal tariffs has pushed up the rupee's volatility expectations to a near two-year high as traders grapple with the economic and geopolitical implications of a trade war.
A broadly weaker dollar had lifted the rupee to its year-to-date high last week and spurred a pickup in importer hedging.
But the currency reversed course this week after China hit back with a threat of matching the 34% US tariffs, which prompted President Donald Trump to threaten even higher levies.
The rupee's U-turn also prompted some exporters to become active again, a trader added.
"The broader trend of rupee for the next one month could be between 84.50 and 86.50," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
With Reuters inputs
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