Mumbai, Aug 8 (PTI) Rupee pared its intra-day losses and ended flat at 87.58 against US dollar on Friday helped by a weak American currency and inflow of foreign fund even as India-US trade deal uncertainty played spoilsport.

Forex traders said rupee traded in a narrow range amid weakness in domestic equity markets.

They said the overall market sentiment remained under stress after President Donald Trump's aggressive move, which kicks in 21 days, threatening to raise total duties on select Indian exports to as high as 50 per cent -- making them among the most heavily taxed US imports globally.

At the interbank foreign exchange, the domestic unit opened at 87.56 and moved in a range of 87.52-87.75 during the day before settling at its previous closing level of 87.58 against the greenback.

On Thursday, the rupee logged a gain of 14 paise versus dollar.

"Uncertainty revolving around the trade war pressurised the rupee. However, softness in crude oil prices prevented a sharp fall," Anuj Choudhary – Research Analyst, commodities and currencies, Mirae Asset Sharekhan, said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.16 per cent to 98.24.

"Overall weakness in the US dollar amid weakening labour market and rising odds of rate cut may support the rupee at lower levels," Choudhary further noted.

On August 6, the United States announced an additional 25 per cent tariff on all Indian imports, on top of an existing 25 per cent duty, taking the total duty to 50 per cent effective August 27.

Meanwhile, Brent crude prices rose 0.60 per cent to USD 66.83 per barrel in futures trade.

On the domestic equity market front, Sensex tumbled 765.47 points to settle at 79,857.79, Nifty declined 232.85 points to 24,363.30.

Foreign institutional investors (FIIs) turned net buyer after several days and purchased equities worth Rs 1,932.81 crore on Friday, according to exchange data.

India's forex reserves dropped by USD 9.322 billion to USD 688.871 billion for the week ended August 1 in one of the highest declines in the recent past, the RBI data showed on Friday.

The overall reserves rose by USD 2.703 billion to USD 698.192 billion in the previous reporting week.

Meanwhile, President Trump has ruled out the possibility of trade negotiations with India, until the issue of tariffs is resolved.

"No, not until we get it resolved," Trump said in the Oval Office on Thursday in response to a question on whether he expects increased trade negotiations with India since he has announced 50 per cent tariffs on the country.

Last week, Trump had announced a 25 per cent reciprocal tariffs on India that came into effect from August 7.

The US president also signed an executive order slapping an additional 25 per cent levy on India for New Delhi's purchases of Russian oil, bringing the total duties to 50 per cent, among the highest imposed by the US on any country in the world.

The additional 25 per cent duty will come into effect after 21 days or August 27. PTI DRR HVA

US tariffs on Indian imports increase trade uncertainty, pressuring the rupee despite foreign inflows and weak dollar. United States executive measures imposing an additional tariff on Indian imports have created trade policy uncertainty transmitted to India's foreign exchange markets, pressuring the rupee while a softer US dollar and foreign portfolio inflows partially offset volatility; the executive action sets a trigger period for the levy, risks suspension of trade talks, and contributes to notable weekly fluctuations in India's forex reserves, affecting exporters, importers and market liquidity.