Rupee gains after two days of record lows; ends at 88.16/$

Indian Rupee today: The domestic currency ended 4 paise higher at 88.16 against the dollar on Tuesday, according to Bloomberg

The Indian rupee closed marginally higher on Tuesday as stronger economic data outweighed trade-related foreign fund selloffs in equity markets.

 

The domestic currency ended 4 paise higher at 88.16 against the dollar on Tuesday, according to Bloomberg. So far this year, the rupee has depreciated 2.89 per cent, making it the worst performer among Asian peers.

 

Offshore positions are also getting trimmed, which leads to some appreciation in the rupee, according to Kunal Sodhani, head treasury at Shinhan Bank India. But, feeds on the India-US tariff front still continues to be an important element to watch out which may put some pressure on the rupee, he said. "As per charts, 87.70 levels may act as an important support, while 88.14 acts as first resistance, followed by 88.35 levels."

 

   

Foreign portfolio investors (FPIs) continue to pare holdings in both equities and debt, amid concerns that India’s trade deficit could widen following the Donald Trump administration’s 50 per cent tariff on Indian goods, among the steepest globally. So far this year, FPIs sold equities worth nearly ₹1.4 trillion, as per NSDL data.   

 

Investors are closely watching the Shanghai Cooperation Organisation (SCO) meeting of leaders in Tianjin, with tariff uncertainty weighing on sentiment. Addressing the Summit, the Prime Minister highlighted India's approach to strengthening cooperation under the SCO framework.  

 

Meanwhile, India’s gross domestic product (GDP) grew 7.8 per cent in the first quarter (April-June) of the financial year 2025-26 (FY26), hitting a five-quarter high. However, Nominal GDP increased 8.8 per cent to ₹86.05 trillion during the June quarter.  The manufacturing purchasing managers index (PMI) touched a nearly 18-year high of 59.3 in August.

 

The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.60 per cent at 98.35, a day after a US federal appeals court ruled that US President Donald Trump's trade tariffs were illegal. With job data, inflation print and the Federal Reserve’s rate, traders will face a key test this month. 

 

In commodities, crude oil prices rose amid concerns that intensifying air strikes in the Russia-Ukraine war could lead to supply disruptions. Brent crude price was up 1.88 per cent at 69.43 per barrel, while WTI crude prices were higher by 2.98 per cent at 65.92 per barrel, as of 3:30 PM IST.