Easing of foreign fund outflow and firm domestic equity markets further boosted the rupee, according to forex traders.

At the interbank foreign exchange, the rupee opened at 85.75 against the US dollar and traded in a narrow range of 85.64-85.80 before settling at 85.73, up 21 paise from the previous close.

The local unit logged a steep fall of 54 paise to settle at 85.94 against the US dollar on Monday.

“The rupee was range bound with chances of a US-India (pact) being concluded today (Tuesday), keeping rupee on an upward trend. The closing was slightly higher but a conclusive mini-trade deal could allow rupee to gain once again towards 85.30/40 levels,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

The local unit is expected to be in the range of 85.30-86.00 on Wednesday with expectations of some positive developments tonight, he said.

According to Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, rupee gained due to weak US dollar and softness in crude oil prices, however, weak global markets and ongoing uncertainty over trade tariffs capped its sharp gains.

“We expect rupee to weaken as trade tariff uncertainty may weigh on the domestic currency,” Choudhary said, adding, “USD-INR spot price is expected to trade in a range of Rs 85.50 to Rs 86.05.” Brent crude, the global oil benchmark, was down 0.55 per cent to USD 69.20 per barrel in futures trade.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.18 per cent to 97.30.

Meanwhile, at the domestic equity market, the Sensex rose 270.01 points to settle at 83,712.51, while the Nifty gained 61.20 points to close at 25,522.50.

Foreign institutional investors (FIIs) offloaded equities worth Rs 26.12 crore on a net basis on Tuesday, according to exchange data. PTI TRB HVA