The rupee closed at 88.5675 against the U.S. dollar, up 0.1% on the day.
The currency lingered near the 88.70 mark for most of the session, with dollar sales from a few foreign banks prompting an uptick in the latter half, traders said.
The market took note of the optimistic remarks on U.S.-India negotiations but the reaction was muted as investors wait for concrete developments. On Monday, U.S. President Donald Trump said that Washington was getting close to reaching a deal with India.
Analysts at ING expect India to clinch a trade deal in the coming few months but warned that “prevailing uncertainty around tariffs may weigh on investor sentiment in the near term.”
India’s benchmark equity indexes, the BSE Sensex and Nifty 50, rose about 0.5% each. The dollar index was steady at 99.6 and most Asian currencies slipped.The focus for global markets is on the imminent end of the U.S. government shutdown, which has delayed economic data, central to gauging the outlook for interest rates in the world’s largest economy.The Federal Reserve cut interest rates at its most recent meeting, but Chair Jerome Powell cautioned against assuming another cut in December. Money markets are currently pricing in a 63% chance of a 25 basis point rate cut next month.
An end to the shutdown is expected to lead to a raft of data releases which could prompt a reassessment of these expectations.
