Mumbai: The Indian rupee opened on a cautious note on Wednesday, caught between optimism over renewed trade dialogue with the United States and mounting concerns over fresh tariff threats.

The one-month non-deliverable forward indicated the rupee would start trading between 88.08 and 88.12 per dollar, close to Tuesday’s closing level of 88.10. While softer U.S. jobs data briefly supported the currency, pushing it to an intraday high of 87.95, the rupee failed to hold those gains as pressure from U.S. tariff concerns resurfaced.

U.S. President Donald Trump said that trade talks with India are continuing and expressed optimism about reaching common ground. He also signaled an upcoming conversation with Prime Minister Narendra Modi to address barriers in bilateral trade. Modi described the United States as a natural partner and called for a swift conclusion to discussions.

However, tensions remain as Trump has urged the European Union to impose steep tariffs on Indian and Chinese goods over their purchases of Russian oil. The U.S. has already levied duties as high as 50 percent on Indian exports, which have raised concerns among exporters and investors.

Finance Minister Nirmala Sitharaman said the government is closely monitoring the rupee’s movements and indicated that relief measures are being prepared to support exporters impacted by the new tariffs.

Broader market cues added to the uncertainty. Brent crude prices climbed to around $66.90 per barrel, while foreign investors pulled over $256 million from Indian equities and bonds in recent sessions, adding to pressure on the currency.

Market participants expect the rupee to remain volatile in the coming weeks, with hopes of a breakthrough in trade talks tempered by persistent tariff threats and global economic headwinds.