Rupee trades flat amid trade deal hopes; opens at 88.69/$

Indian Rupee today: The domestic currency opened one paise higher at 88.69 against the greenback on Tuesday

The Indian Rupee continued to trade flat on Tuesday after a slight fall in the previous session amid optimism over India's potential trade deal with the US.

 

The domestic currency opened one paise higher at 88.69 against the greenback on Tuesday, according to Bloomberg. The Rupee has risen 0.10 per cent this month, while it has fallen 3.6 per cent this year.

 

While global risk appetite has improved and the US dollar has softened slightly, the currency has remained steady, caught between domestic support measures and external pressures, Amit Pabari, managing director at CR Forex Advisors, said. "It’s a currency on alert, yet far from losing its footing."

 

 

The rupee weakness is also limited as the Reserve Bank of India (RBI) has been quietly shaping the rupee’s path, providing support that keeps the currency steady amid fluctuating domestic and global conditions, he noted. 

 

According to Pabari, in the near term, USD/INR is likely to move within a steady band of 88.40-88.80, facing resistance near 88.80–89.00 in the short term. "However, the medium-term bias remains tilted toward rupee strength backed by improving investor sentiment. A decisive dip below 88.40 could pave the way for further gains toward 87.70-88.00."

 

Meanwhile, the record 41-day US government shutdown is nearing an end after the Senate passed a temporary funding measure. The Senate’s move has lifted sentiment, but the dollar’s recent strength stems more from the lack of negative news than from solid fundamentals, analysts noted. The measure of the greenback against a basket of six major currencies was up 0.06 per cent at 99.65.

 

In commodities, crude oil prices steadied amid softening market metrics and while trades waited for reports that may hint at global surplus. Brent crude price was down 0.19 per cent at 63.94 per barrel, while WTI crude prices were lower by 0.20 per cent at 60.01 per barrel, as of 9:15 AM IST.

 

Adding to the currency's optimism, Goldman Sachs has upgraded its stance on Indian equities to 'overweight,' indicating that the prolonged earnings downgrade cycle may have reached its end. Echoing this sentiment, HSBC also remains positive, highlighting attractive opportunities in equities, the rupee, and India’s 10-year government bonds.