Rupee supported by hopes of India-US trade deal, weak US jobs data

MUMBAI (Reuters) -The Indian rupee is likely to open marginally higher on Thursday, supported by an uptick in most Asian currencies on optimism over signing trade deals with the United States before the tariff deadline.

The 1-month non-deliverable forward indicated an open between 85.60 and 85.64 versus 85.7025 in the previous session.

U.S. President Donald Trump announced an agreement with Vietnam that cuts U.S. tariffs on many Vietnamese goods to 20% from his previously announced 46%.

The deal has sparked hopes that other countries, including India, will be able to negotiate trade deals with Washington before July 9 when Trump’s 90-day pause on so-called reciprocal tariffs is set to expire.

Most Asian currencies traded higher, while equities were mixed.

The U.S. and India are pushing for a trade pact after Trump’s deal with Vietnam.

Trump threatened a 26% duty on Indian goods under his reciprocal tariff plan, with the rate temporarily lowered to 10% to allow time for negotiations.

“If the India-U.S. deal is done, it will be more of a relief for the rupee and nothing beyond that,” a currency trader at a bank said.

“I don’t expect a major move if the deal materialises. The bigger reaction will come if it doesn’t.”

Meanwhile, in a boost for Asian currencies and risk assets, weaker-than-expected U.S. private payrolls data strengthened the case for a Federal Reserve rate cut in the coming months —possibly as early as this month.

U.S. private payrolls unexpectedly fell in June, the ADP National Employment Report showed on Wednesday.

“There is an increased near-term focus on the labour market.. the question is whether this weakness will be corroborated by tomorrow’s labour market report, or if the data will indicate resilience,” ANZ Bank said in a note.

The U.S. non-farm payrolls data for June is due Friday.

** One-month non-deliverable rupee forward at 85.72; onshore one-month forward premium at 10 paise

** Dollar index marginally up at 96.77

** Brent crude futures down 0.9% at $68.5 per barrel

** Ten-year U.S. note yield at 4.26%** As per NSDL data, foreign investors bought a net $129.1 million worth of Indian shares on July 1

** NSDL data shows foreign investors sold a net $37.4 million worth of Indian bonds on July 1

(Reporting by Nimesh Vora; Editing by Sonia Cheema)