The Indian rupee rose in value on Tuesday because of regional currency appreciation and investor relief from the delayed U.S. tariff implementation date which reduced market pressure.
The rupee settled at 85.6950 per dollar, up 0.2% from Monday. The market reaction to U.S. President Donald Trump’s tariff letters to 14 nations remained calm because the extended August 1 deadline provided time for negotiations.
The ING analysts stated in their note that these letters represent ongoing talks instead of definitive measures. The KOSPI 200 index together with South Korea’s won experienced a 0.7% increase as most Asian currencies and equities rose.
The Indian equity market showed small increases in its benchmark indices. The rupee remains behind its peer currencies because of ongoing capital outflows and cautious monetary policies despite the general decline in the dollar value.
The interbank dollar sales operations helped the market during this day according to market participants. The market reduced its expectations for U.S. rate cuts which caused forward premiums to decrease while the 1-year implied yield dropped 4 basis points to 1.95%.
The rupee will stay within its current range until a definitive U.S.-India agreement emerges to create upward momentum.
