The Indian rupee appreciated 38 paise to 90.40 against the US dollar in early trade on Thursday, supported by foreign fund inflows and suspected intervention by the Reserve Bank of India (RBI). 

At the interbank foreign exchange market, the domestic currency opened at 90.55 against the greenback. It gained momentum during the session to touch an early high of 90.40, marking a rise of 38 paise over its previous close. In initial volatility, the rupee also touched 90.56 against the American currency. 

On Wednesday, the rupee had depreciated 22 paise to settle at 90.78 against the US dollar.

Foreign fund inflows were not substantial 

Forex traders said that while foreign fund inflows were not substantial, they provided a psychological anchor to the currency. Market participants also pointed to the RBI’s efforts to ensure adequate liquidity in the banking system, which helped support the rupee. 

However, sentiment remained cautious amid evolving developments surrounding the India-US trade deal. Traders noted that while markets initially welcomed the agreement, fresh concerns surfaced after the White House released a fact sheet outlining key terms of the pact. 

According to the fact sheet, India will eliminate or reduce tariffs on all US industrial goods and a broad range of American food and agricultural products. The details have prompted renewed scrutiny among market participants. 

Globally, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.05% lower at 96.78. 

Brent crude gains 0.42%

Meanwhile, Brent crude, the global oil benchmark, was up 0.42% at $69.69 per barrel in futures trade, adding another layer of focus for currency traders given India’s oil import dependence. 

Benchmark equity indices Sensex and Nifty declined in early trade on Thursday dragged down by heavy losses in IT stocks such as Infosys and Tata Consultancy Services amid weak cues from US markets. Extending the previous day's decline, the 30-share BSE Sensex fell 421.66 points, or 0.50%, to 83,811.98 in early trade. The 50-share NSE Nifty fell 121.10 points, or 0.47%, to 25,832.75. Analysts said rising crude oil prices also added to the cautious sentiment among investors. 

On the institutional front, foreign institutional investors (FIIs) purchased equities worth ₹943.81 crore on Wednesday, according to exchange data.