The rupee ended 3 paise higher at 85.70 against the US dollar on Thursday, supported by optimism over a possible US-India trade deal, even as equity markets closed in the red.The local currency opened at 85.62 and moved between 85.53 and 85.70 during the session before settling 3 paise higher than Wednesday’s close of 85.73, according to interbank foreign exchange data, PTI reported.“Rupee traded with minor gains on a weak US dollar and an overnight decline in crude prices,” said Anuj Choudhary, research analyst at Mirae Asset Sharekhan. “However, weak domestic markets capped sharp gains.”Choudhary added that expectations of a US-India mini trade deal could support the rupee, though global sentiment remained cautious amid tariff uncertainties. He projected the USD-INR spot rate to remain in the Rs 85.40–85.95 range.On the trade front, a senior government official said a commerce ministry team will soon head to Washington for another round of negotiations. Talks are expected to address differences in sectors such as agriculture, automobiles, steel and aluminium.“We are negotiating a complete deal. Whatever is finalised can be packaged as an interim deal, and talks on the rest will continue,” the official said.India is also pushing for removal of additional import duties — 26 per cent on Indian goods — that the US has extended till August 1. It has reserved the right to impose retaliatory duties under WTO rules.Meanwhile, Brent crude fell 0.34% to $69.95 per barrel. The dollar index eased 0.15% to 97.41.In domestic markets, the Sensex dropped 345.80 points to 83,190.28, while the Nifty fell 120.85 points to 25,355.25. Foreign institutional investors were net buyers of Rs 221.06 crore in equities, according to exchange data.