The rupee strengthened by 17 paise to 85.56 against the US dollar in early trade on Thursday, supported by modest progress in US-India trade discussions and the extension of tariff deadlines on select Indian exports, which provided short-term relief.

According to forex traders, the rupee moved within a narrow but volatile range as market participants remained cautious, awaiting further clarity on the proposed interim trade agreement between the two nations.

At the interbank foreign exchange market, the domestic currency opened at 85.62 against the dollar and soon rose to an early high of 85.56, marking a 17 paise gain from its previous close.