Mumbai, Jul 1 (PTI) The rupee appreciated 42 paise to 85.34 against the US dollar in early trade on Tuesday, as the American unit plunged to a multi-month low and a positive trend in domestic equities boosted sentiments.
Forex traders said the US dollar index weakened in the overseas market as President Donald Trump’s growing influence on Federal Reserve policy revived fears over the central bank’s independence.
Moreover, brent crude prices remained subdued, offering a buffer to India’s import bill and helping cool inflation.
At the interbank foreign exchange, the domestic unit opened at 85.66 against the greenback. In initial trade, it witnessed a high of 85.34, registering a rise of 42 paise over its previous close.
On Monday, the rupee settled 26 paise down at 85.76 against the dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.17 per cent to 96.71.
The US Dollar Index plunged to a multi-month low of 96.614, rattled by fresh political noise. President Donald Trump’s growing influence on Federal Reserve policy — including plans to replace Fed Chair Powell — has unnerved investors and revived fears over the central bank’s independence, CR Forex Advisors MD – Amit Pabari said.
Brent crude, the global oil benchmark, went down 0.24 per cent to USD 67.61 per barrel in futures trade.
“The USDINR pair is expected to find strong support near 85.20–85.40, with a rebound toward 86–86.50 likely in the coming days amid weak domestic data, equity outflows, and global uncertainty,” Pabari added.
Meanwhile, in the domestic equity market, Sensex advanced 200.92 points or 0.24 per cent to 83,807.38, while Nifty rose 57.85 points or 0.23 per cent to 25,574.90.
Foreign institutional investors (FIIs) offloaded equities worth Rs 831.50 crore on a net basis on Monday, according to exchange data.
On the domestic macroeconomic front, India’s industrial production growth slowed to a nine-month low of 1.2 per cent in May 2025 due to poor performance of manufacturing, mining and power sectors caused by the early onset of Monsoon, according to official data released on Monday.
The central government’s fiscal deficit fell to 0.8 per cent of the full-year target at the end of May, mainly due to a whopping Rs 2.69 lakh crore dividend received from the Reserve Bank of India.
