The rupee closed at 85.6775 against the U.S. dollar, up 0.1% on the day.
The local unit hit an intraday high of 85.52 earlier in the day before paring gains on corporate hedging demand, traders said.
The dollar index slipped 0.5% to 99.6, with Asian currencies were mostly higher. Gold hit a record high, while the Swiss franc rose 0.5% versus the dollar.
Worries about the economic impact of U.S. tariffs have dragged the dollar index down nearly 4% so far in April.
The latest round of weakness followed a decision to impose restrictions on U.S. chip exports to China, along with a U.S. probe into whether critical minerals should face tariffs. “Despite the dollar sell-off and renewed risk aversion, the UST bond market so far is trading as you’d expect with yields lower, although the 30-year yield is close to unchanged suggesting still fragile sentiment,” MUFG Bank said in a note. Even as the latest tariff jitters weighed on most Asian and European equity indexes, India’s benchmarks, the BSE Sensex and Nifty 50 ended in the green. Equity futures indicated that U.S. stocks would open lower as well.
Indian benchmarks have outperformed regional peers since April 2, when U.S. President Donald Trump announced reciprocal tariffs amid wagers that India’s domestically oriented economy could be better placed to weather the impact of trade upheavals.
Investors await remarks from Federal Reserve Chair Jerome Powell and U.S. retail sales data, both due later on Wednesday.
