The Indian rupee strengthened modestly on Friday, climbing 0.2% to 85.83 against the U.S. dollar by mid-morning trading, as a weakening greenback fueled gains across emerging market currencies. The rebound followed Thursday’s slip below the 86-per-dollar threshold — a level last breached a month ago — and coincides with rising investor unease over the fiscal trajectory of the United States.

The Indian Rupee has been showing steady gains amid strong capital inflows and evolving market sentiment. With traders closing speculative long positions on the US Dollar and increased investments through foreign banks, the Rupee is experiencing an upward trend that positions it near its best weekly performance in two years.