Wanting forward, the sentiment has turned extra constructive, encouraging a risk-on temper, which may lend additional assist to the rupee
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Rupee appreciated about 1.4 per cent in opposition to the greenback on Tuesday, closing at 90.27. The native foreign money touched a three-week excessive of 90.05 throughout the session, lifted by a constructive shift in sentiment following India’s commerce take care of the US.
The settlement, which considerably lowers the US tariffs on Indian items, has helped take away a key overhang that had been weighing on Indian monetary markets in latest months. Indian equities and the rupee had come below sustained strain since the tariffs had been imposed, triggering heavy overseas investor outflows and inserting home property amongst the weaker performers in rising markets this 12 months.
Wanting forward, the sentiment has turned extra constructive, encouraging a risk-on temper, which may lend additional assist to the rupee. That mentioned, capital outflows remain the largest issue that has impacted the Indian foreign money in latest weeks. Based on NSDL knowledge, internet overseas portfolio investor outflows up to now this 12 months have been $2.7 billion, underscoring the drag from persistent promoting strain.
Nevertheless, the commerce deal breakthrough with the US, coming shut on the heels of a long-awaited commerce take care of the European Union, has improved the outlook for overseas investor sentiment. If this interprets into a revival of portfolio flows into Indian equities and bonds, it’ll present a significant tailwind for the rupee in the close to time period.
On the charts
The rupee rose above a resistance at 91 and is at present hovering round 90.20, one other necessary stage from technical perspective. So, we’d see a minor dip, presumably to 90.60 from the present stage of 90.27.
But then, the native foreign money can resume the uptrend, doubtlessly taking it to 89.50. Whereas the chart hints this, one must also contemplate elements like how comfy the RBI could be if the rupee rises shortly and the finer particulars in the commerce deal. In case one thing has a damaging affect, the home foreign money would possibly slip again to 91.
One other key issue is the greenback, which has been on a restoration since final week. At present buying and selling at 97.60, the greenback index rebounded from 95.50. Because it stands, it’s prone to rise additional, in all probability to 98. Such an uptick can weigh on the rupee.
Outlook
Total, the relief rally could face a momentary pause round the 90.20 stage, with the rupee prone to witness a gentle pullback in the coming classes, presumably in direction of 90.60.
Printed on February 3, 2026
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