FX.co ★ Indian Rupee Stays Sideways

The Indian rupee remained relatively stable at approximately 88.7 against the USD, moving within a narrow trading range. Optimistic remarks from US President Trump regarding a prospective trade agreement between India and the United States provided limited support. President Trump indicated that the US is nearing a deal that would strengthen economic and security relationships and could eventually lead to reduced tariffs on Indian goods. Nonetheless, the currency's muted reaction underscores ongoing market skepticism, as traders suggest that the rupee will likely respond only upon the finalization of such an agreement. The continued absence of a tangible deal has negatively impacted market sentiment, contributing to the rupee’s lackluster performance this year. Concurrently, the US dollar gained strength on optimism about an end to the unprecedented US government shutdown, placing additional pressure on the rupee. Despite persistent hedging demand and muted foreign portfolio inflows affecting the rupee, market interventions since late September have been instrumental in keeping it above the record low of 88.80.