The Indian rupee opened sharply higher on Tuesday, appreciating 1.2 per cent to 90.40 against the US dollar, compared to its previous close of 91.5125. The strong opening reflects improved market sentiment following easing concerns over trade tariffs and policy uncertainty.
Market participants said reduced tariff-related risks are expected to boost India’s export competitiveness and support investor confidence. Marc Velan, Head of Investments at Lucerne Asset Management, noted that lower uncertainty could lift near-term sentiment for both the rupee and domestic equities. MUFG Bank added that while foreign inflows remain slow, the India–US trade agreement may provide medium-term support to the currency.
In recent months, importers had increased forward dollar purchases to hedge against further rupee weakness, while exporters delayed hedging, creating a mismatch that put pressure on the currency. Analysts believe this imbalance may gradually correct as tariff worries subside, helping stabilise forex market dynamics.
Traders also expect speculative bearish positions on the rupee to unwind, aiding recovery. However, experts cautioned that the sustainability of gains will depend on actual foreign fund inflows and broader market sentiment in the coming days.