The Indian Rupee rose on Tuesday ending a two-day downward streak, on renewed hope of a possible trade pact between India and the United States. The national currency has been trading at 88.56 against the US dollar, which is 13 paise stronger and the better sentiment in the forex market.
Market records indicate that the Rupee has performed well by 0.23 percent in this month but still remains among the worst performing currency in Asia this year since it has declined by 3.45 percent on the whole. The gain on Tuesday was explained by traders with positive statements by US President Donald Trump who indicated the possibility of a new trade agreement between the two countries.
“We have a deal with India underway, but this is a different one than what we had previously. They do not love me at present, but they will love me. We are doing well and soon we may lower tariffs on Indian products,” Trump remarked. The remarks enhanced the confidence of the market, since the investors took the remarks to mean that there was the alleviation of tension between the two countries on issues concerning trade.
In the meantime, the mood in international markets also rose as a temporary funding bill by the US Senate passed which could end the government shutdown that lasted a record 41 days. According to analysts, although the power of the US dollar has continued to be strong, it has mostly been fuelled by lack of negative economic news rather than good fundamentals. The dollar index that follows the currency against a basket of six major peers moved up 0.05% to 99.63.
Commodities, oil prices in the commodity market were stable as investors were waiting on reports that will either show an indication that the world has surpluses of supply. Brent crude and West Texas Intermediate (WTI) crude increased 0.44 per cent and 0.38 per cent respectively at 3:45 PM IST.
On the whole, the market participants indicated that the future of the Rupee is tentatively optimistic, based on the development of the US-India trade negotiations and the mood of the risk.
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