MUMBAI, India — The Indian rupee surged more than 1 percent on Tuesday, trading at 90.29 against the U.S. dollar, as investor sentiment improved following the announcement of an India-U.S. trade agreement that also encouraged foreign inflows.
The local currency had closed at 91.53 on Monday and had already touched a two-week high in the previous session, gaining 48 paise after the Reserve Bank of India was reported to have intervened in the spot market.
Analysts said the rupee strengthened sharply against the dollar before consolidating within the 90.20–91.20 range. Current levels reflect a corrective pullback after the currency failed to sustain moves above the 92 mark, they added.
“The pullback is corrective in nature, with the broader higher-high, higher-low structure still intact on higher time frames,” market participants said.
According to analysts, the near-term technical outlook remains constructive, with a break below the 90.50–90.80 zone potentially opening the way toward the 90–89.80 levels.
They also noted that a softer dollar-rupee pair has capped upside in MCX bullion prices, although the medium-term outlook for precious metals continues to remain supportive.
U.S. President Donald Trump on Monday announced a trade deal with India that includes a reduction in reciprocal tariffs on Indian goods from 25 percent to 18 percent, following a phone conversation with Prime Minister Narendra Modi.
The agreement reportedly also includes India’s commitment to reduce purchases of Russian oil and increase imports from the United States and potentially Venezuela.
Analysts said easing trade uncertainty following the India-U.S. agreement could attract foreign investment into Indian equities and debt markets, supporting further demand for the rupee. They cautioned, however, that the Reserve Bank of India’s stance in the coming sessions will remain a key factor to watch.
Market participants added that the combined impact of the India-U.S. trade deal, the India-EU trade agreement, and a growth-focused Union Budget is expected to improve overall market sentiment and trigger near-term foreign capital inflows, potentially strengthening India’s balance of payments position. (Source: IANS)
