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The rupee appreciated 12 paise to 88.04 against the US dollar in early trade on Tuesday as investors are awaiting cues from the US-India trade talks in New Delhi, where American negotiator Brendan Lynch will meet Indian officials on Tuesday.

Forex traders said the rupee has faced persistent pressure from uneven flows and US President Donald Trump's tariff shocks.

Accordingly, the Reserve Bank of India has stepped up its presence in the offshore non-deliverable forward (NDF) market to cushion volatility, they said.

At the interbank foreign exchange market, the rupee opened at 88.05 against the US dollar, then touched 88.04, registering a gain of 12 paise from its previous close.

In the initial trade, the domestic unit also touched 88.16 against the greenback.

On Monday, the rupee settled higher by 10 paise at 88.16 against the US dollar.

"The key catalyst this week will be US-India trade talks in New Delhi," CR Forex Advisors MD Amit Pabari said, adding that "if the discussions make real progress, it could open the door to a breakthrough and give the rupee much-needed support, especially with India's fundamentals already showing strength." Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 97.22, lower by 0.08 per cent.

Brent crude, the global oil benchmark, was trading 0.25 per cent higher at USD 67.61 per barrel in futures trade.

On the domestic equity market front, Sensex climbed 201.69 points to 81,987.43 in early trade, while the Nifty was up 52.8 points to 25,122.

Foreign Institutional Investors offloaded equities worth Rs 1,268.59 crore on a net basis on Monday, according to exchange data.

Meanwhile, the Trump administration's chief negotiator Brendan Lynch will hold a day-long talk on the India-US bilateral trade deal on Tuesday.

Five rounds of negotiations for the India-US Bilateral Trade Agreement (BTA) have been held, and the sixth round of talks, scheduled from August 25-29, was postponed following the imposition of 50 per cent tariffs on Indian goods by the US.

India's exports have been affected following the imposition of 50 per cent tariffs on shipments to the US.

Last week, Prime Minister Modi had reacted warmly to US President Donald Trump's positive assessment of trade talks between the two countries, expressing confidence that the ongoing negotiations will pave the way for unlocking the limitless potential of the partnership between them. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)