Post by : Badri Ariffin

The Indian rupee opened stronger on Thursday, appreciating 13 paise to 87.80 against the U.S. dollar, driven by renewed optimism over a potential trade deal between India and the United States. Investors reacted positively after indications that tariffs on Indian goods could be reduced from 50% to 16%, sparking a wave of optimism across domestic markets.

Forex traders noted that foreign fund inflows, coupled with a positive trend in domestic equities, strengthened the rupee. The interbank market saw the currency open at 87.80, marking a significant gain from the previous close. After a brief holiday break for Diwali and Balipratipada earlier this week, trading resumed with heightened market activity.

The optimism stems from recent discussions between Prime Minister Narendra Modi and U.S. President Donald Trump. During a phone call, both leaders addressed trade issues, fueling market expectations that a bilateral deal could be reached soon. Trump suggested India would reduce its oil imports from Russia, easing trade tensions that had arisen following the steep U.S. tariffs.

Domestic equity markets mirrored this upbeat sentiment. The Sensex surged 734.36 points to 85,160.70, while the Nifty jumped 198.3 points to 26,066.90 in early trading. Foreign Institutional Investors actively bought equities worth Rs 96.72 crore, reflecting growing confidence in Indian markets.

Global factors also influenced the rupee. The dollar index, which tracks the U.S. dollar against six major currencies, inched up 0.15% to 99.04, while Brent crude oil prices rose 2.64% to $64.24 per barrel. Analysts highlight that while current trends are positive, the rupee’s trajectory will remain sensitive to global economic cues, U.S. policy shifts, and domestic monetary signals.

The combination of trade optimism, equity gains, and foreign inflows has provided a notable boost to the rupee, offering a cautious but hopeful outlook for investors.

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