Rupee rises 16 paise to 85.41 against U.S. dollar in early trade

Rupee expected to trade in narrow range amid oil prices, U.S.-Iran talks, China data, Moody's downgrade, and foreign inflows.

The rupee appreciated 16 paise to 85.41 against the U.S. dollar in early trade on Monday, supported by a weak American currency in the overseas market and strong foreign fund inflows.

Forex traders said the rupee is expected to trade in a narrow range as Brent oil prices ticked lower amid oversupply concerns, U.S.-Iran nuclear deal talks, while investors awaited the China Factory data.

Investors were also cautious as global rating agency Moody's downgraded U.S. investment grade rating, they added.

At the interbank foreign exchange, the domestic unit opened at 85.43 against the greenback, then rose to 85.41, registering a gain of 16 paise over its previous close.

In initial trade, the local unit also touched 85.61 against the American unit.

On Friday, the rupee pared its gains and settled 3 paise lower at 85.57 against the dollar.

"The pair is expected to trade in the 85–85.80 range. If the dollar dips due to concerns from the U.S. credit rating downgrade, the rupee could see some upside. Steady foreign inflows may also help support the currency," CR Forex Advisors MD Amit Pabari said.