The rupee continue to appreciate with the optimism on India-US trade deal and weakness in the dollar index. The domestic currency gained 25 paise to 87.80 on Wednesday, highest monthly gain since May, according to Bloomberg data.
“Dollar weakness, along with our optimism around our US-India trade deal led to rupee appreciation,” said a treasury head at a private sector bank. “If optimism continues and Fed delivers higher-than-expected rate cut with a dovish tone, dollar index will further weaken, which helps rupee to appreciate,” he added.
Fourth straight day of gains
The domestic currency appreciated for the fourth consecutive session on Wednesday, gaining 64 paise from the record low. It fell to a record low of 88.44 on September 11 on account of worry over high tariffs on Indian goods. So far in the current financial year, the currency declined 2.75%.
“The market participants seem to have unwinded long side USD-INR position considering broader dollar weakness against the majors and also awaiting some positive feeds on the India-US tariff trade policy front,” said Kunal Sodhani, head of treasury, Shinhan Bank.
Rupee still lags Asian peers
The dollar index fell to 96.76 on Wednesday ahead of FOMC meeting, which is expected to cut 25 basis points (bps). Despite weakness in the dollar index, Indian rupee continue to be the worst performer compared to other Asian currencies. Barring India, all other Asian currencies gained 0.8-10.2% in FY26.