The rupee opened stronger against the US dollar on Thursday. Foreign investors stayed buyers for a second consecutive session, aiding the currency.

The Indian unit opened 21 paise higher at 85.48 to the dollar. The rupee closed below the 86-mark to settle at 85.69 against the US dollar on Wednesday.

Tokyo and Washington are underway with trade negotiations, while Beijing has also expressed interest in pursuing talks, given certain conditions are met, boosting risk appetite.

“Risk sentiment briefly improved after China expressed its willingness to resume trade negotiations with the United States, provided that certain key preconditions are fulfilled such as a call for greater diplomatic respect, a consistent US trade stance, attention to its concerns on sanctions and Taiwan, and the appointment of a lead negotiator with Trump’s full backing,” said Abhishek Goenka, founder and chief executive officer of India Forex Asset Management – IFA Global.

“(The rupee) is likely to open around 85.60 and trade a 85.45-85.75 range with a sideways bias,” said Goenka.

The dollar index was trading 0.24% higher at 99.51 as of 08:59 a.m. Fed Chair Jerome Powell said on Wednesday that US economic growth appeared to be slowing, as consumer spending was growing modestly, a surge in imports to avoid tariffs was likely to weigh on GDP estimates, and overall sentiment was souring.

“Despite heightened uncertainty and downside risks, the US economy remained in a solid position,” said Anil Kumar Bhansali, head, treasury and executive director, Finrex Treasury Advisors LLP.

Oil prices advanced for a second consecutive session after the US declared to reduce Iran’s energy exports to zero. Brent crude climbed above $66 a barrel on open after nine sessions, and West Texas Intermediate traded near $63. 

The June future contract of Brent crude was trading 0.88% up at $66.43 a barrel as of 09:04 a.m.

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