The rupee extended its gains for the second straight session on Friday, closing 7 paise higher at 94.33 against the US dollar, as optimism over India-US trade negotiations supported sentiment, although a stronger dollar and continued geopolitical uncertainty capped gains.The local currency opened at 94.30 against the dollar and traded in a range of 94.20-94.52 during the session before settling at 94.33, according to PTI.On Thursday, the rupee rose by 10 paise to close at 94.40 against the US dollar.Forex traders said the local currency gained support from expectations that negotiations on an interim trade agreement between India and the United States may accelerate in the coming days.Indian Foreign Minister Vikram Misri said on Thursday that trade occupied a prominent place in discussions between Prime Minister Narendra Modi and US President Donald Trump, as both sides asked negotiators to accelerate efforts to conclude the proposed trade agreement.However, gains remained limited as investors continued to monitor developments surrounding the proposed US-Iran peace process.Market sentiment turned cautious after reports that US Vice President JD Vance postponed his scheduled visit to Switzerland for talks with Iranian negotiators, with the White House citing logistical reasons.
Dilip Parmar, research analyst at HDFC, said: “The rupee continues to be the main performer among its Asian counterparts, supported by renewed capital inflows and lower oil prices. With risk appetite back in the driver’s seat, we expect the local rupee to march towards 94 on the back of dollar inflows. Technically, USDINR is between a crucial resistance at 94.90 and a strong support at 94.10.” Securities, as quoted by PTI.The currency recovered from weakness during the day and could remain range-bound next week, said Anil Kumar Bhansali, head of treasury and CEO at Finrex Treasure Advisors LLP.“The rupee closed slightly stronger at 94.32 after the intraday decline reached 94.52 levels. The range for Monday is expected to be between 94 and 95 as we await further developments on the US-Iran front over the weekend,” Bhansali said.Meanwhile, the dollar index, which measures the US currency against a basket of six major currencies, was down 0.08% at 100.76.Brent crude, the global oil benchmark, fell 0.65% to $79.33 a barrel in futures trading.On the domestic equity front, major indices ended sharply lower, with the Sensex falling 607.08 points to close at 76,802.90 and the Nifty falling 154.90 points to settle at 24,013.10.Foreign institutional investors (FIIs) turned net buyers during the session, buying shares worth Rs 4,859.07 crore, according to exchange data.Masri’s remarks came a day after Modi and Trump held wide-ranging discussions on the sidelines of the G7 summit, the first such interaction between them in 16 months.The Foreign Secretary said that significant progress has been made on the proposed interim trade agreement, and noted that US Trade Representative Jamieson Greer is scheduled to visit India next week to advance negotiations.