Rupee Surges to 87.80/USD on Trade Optimism with US

On Thursday, the Indian rupee kicked off on a strong note, gaining 13 paise to reach 87.80 against the U.S. dollar, amid growing optimism regarding a possible trade agreement between India and the United States. Investors responded favorably to hints that tariffs on Indian products could see a reduction from 50% to 16%, igniting a positive sentiment across local markets.

Forex analysts pointed out that the strength of the rupee was reinforced by foreign fund inflows and a bullish trend in domestic equities. The currency started trading at 87.80 in the interbank market, showing a marked improvement from its previous close. After a brief Diwali and Balipratipada holiday this week, market activity surged as trading resumed.

This optimism arises from recent talks between Prime Minister Narendra Modi and U.S. President Donald Trump. In a phone conversation, they explored trade matters, giving rise to speculation that a bilateral agreement could be imminent. Trump indicated India might lower its oil imports from Russia, easing strains from the recent U.S. tariffs.

Domestic stock markets echoed this positive sentiment; the Sensex gained 734.36 points, reaching 85,160.70, while the Nifty climbed 198.3 points to 26,066.90 during early trading. Foreign Institutional Investors also showed confidence by purchasing equities worth Rs 96.72 crore.

Global influences have also impacted the rupee's performance. The dollar index, measuring the U.S. dollar against a basket of six major currencies, saw a slight increase of 0.15% to 99.04, while Brent crude oil prices rose by 2.64% to $64.24 per barrel. Analysts caution that while current trends remain favorable, the rupee’s future trajectory will hinge on global economic indicators, U.S. policy adjustments, and domestic monetary conditions.

In sum, the confluence of trade optimism, equity market growth, and foreign investments has positively impacted the rupee, providing a cautiously optimistic outlook for investors.