The Indian rupee appreciated by 8 paise, closing at 88.08 (provisional) against the US dollar on Tuesday. This rise comes amid ongoing US-India discussions regarding a proposed trade agreement aimed at resolving challenges arising from significant tariffs imposed during the Trump administration.
Forex traders noted that the rupee gained strength due to positive trends in domestic markets and a weakening dollar, which is currently trading at a two-month low ahead of a two-day Federal Open Market Committee (FOMC) meeting that began on Tuesday. Disappointing economic data from the US has also contributed to this trend.
In the interbank foreign exchange market, the rupee opened at 88.05, reaching an intraday low of 88.16 and a high of 88.01 against the dollar before closing at 88.08 (provisional), reflecting an 8 paise increase from its previous closing rate. On Monday, the rupee closed at 88.16, gaining 10 paise.
Anuj Choudhary, a Research Analyst at Mirae Asset ShareKhan, stated, “We expect the rupee to remain strong due to broad weakness in the US dollar, as disappointing economic data and a struggling labor market have increased expectations of a rate cut by the Federal Reserve.” Choudhary further mentioned that market participants anticipate a 25 basis point rate cut and will closely monitor the Fed Chair’s speech for further insights.
He added, “A dovish commentary may lead to additional declines in the dollar, while a hawkish tone could prompt a pullback.” Choudhary noted that traders would focus on US retail sales and industrial production data, remaining cautious ahead of the FOMC meeting this week. The USD/INR spot price is projected to trade between 87.75 and 88.30.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, decreased by 0.26 percent to 97.04. Brent crude oil, the global benchmark, was trading 0.28 percent lower at $67.25 per barrel in futures markets.
In domestic equity markets, the Sensex rose by 594.95 points to close at 82,380.69, while the Nifty increased by 169.90 points, settling at 25,239.10. However, Foreign Institutional Investors (FIIs) sold equities worth ₹1,268.59 crore on a net basis on Monday, according to exchanges.
The chief negotiators of India and the United States have initiated talks on the proposed trade agreement, aiming to address the uncertainties faced by exporters due to the steep tariffs. Brendan Lynch, the Assistant US Trade Representative for South and Central Asia, leads the US delegation, while Rajesh Agrawal, Special Secretary in the Department of Commerce, heads the Indian side.
Published on September 16, 2025.
