The rupee strengthened by 16 paise to 85.41 against the US dollar in early Monday trade, buoyed by a weaker greenback in global markets and robust foreign capital inflows.
According to forex traders, the rupee is likely to move within a tight range amid falling Brent crude prices due to oversupply concerns and ongoing US-Iran nuclear deal discussions. Market participants are also closely watching China’s factory data for further cues.
Meanwhile, investor sentiment remained cautious following Moody’s downgrade of the US investment-grade rating.