Currency Market News: Rupee jumps 74 paise to 84.62 vs dollar

Rupee appreciated by 74 paise to 84.62 against the US dollar in early trade on Tuesday, buoyed by easing geopolitical tensions and optimism from the US-China tariff truce.

Forex dealers attributed the rally to renewed foreign investor confidence in Indian assets, following positive developments on both regional and global fronts. “The easing of cross-border tension between India and Pakistan, along with the recent US-China trade deal, has improved market sentiment,” a dealer noted.

On Saturday, India and Pakistan agreed to cease all hostilities across land, air and sea borders with immediate effect — a move welcomed by markets. Adding to the upbeat mood, trade talks between Washington and Beijing concluded with both countries agreeing to pause reciprocal tariffs for 90 days, significantly reducing trade-related uncertainties.

At the interbank foreign exchange, the rupee opened at 84.70 and moved between a high of 84.62 and a low of 84.74, strengthening 74 paise from its previous close. On Friday, it had ended 22 paise higher at 85.36 against the greenback. The forex market remained closed on Monday for Buddha Purnima.

PM Modi's stern warning to Pakistan

In his first national address following Operation Sindoor, Prime Minister Narendra Modi warned Pakistan that India would not tolerate nuclear blackmail, while reaffirming India's hardline stance on terrorism.

"Operation Sindoor is India's new policy against terrorism and our unwavering pledge for justice. It is the new normal. We have only kept in abeyance our operations against Pakistan, and the future will depend on their behaviour," PM Modi said.

He added, "India will not succumb to nuclear blackmail and sent a clear message to the world: terror and trade, terror and talks cannot go together."

Also Read:'India will answer back, nuclear blackmail won’t work': PM Modi's strong message to Pak | Key highlights from historic speech

Dollar index retreats; tariffs slashed

The dollar index, which measures the US currency against a basket of six major currencies, was down 0.20 per cent at 101.58 in early Asian trading. On Monday, it had climbed over 1.30 per cent following news of the US-China trade breakthrough.

"US tariffs on Chinese goods dropped from 145 per cent to 30 per cent, and China’s tariffs on US goods fell from 125 per cent to 10 per cent. This lifted optimism around the US economy as trade war tensions cooled," said Amit Pabari, MD of CR Forex Advisors.

He added that recent gains in Brent crude, currently hovering around USD 65 per barrel, could pressure India’s trade balance. However, he noted a bearish technical outlook for the USD-INR pair.

"From a technical perspective, the USDINR pair remains in a downtrend, and every uptick is likely to present a selling opportunity. For now, the pair is expected to trade within a range of 84.50-85.10," he said.

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Markets open slightly lower after stellar Monday

Indian equity benchmarks opened marginally lower on Tuesday after posting their best single-day gain in four years in the previous session. The BSE Sensex opened down 69.34 points, or 0.08 per cent, at 82,360.56, while the Nifty 50 slipped 6.95 points, or 0.03 per cent, to 24,917.75.

Broader markets were mixed. The small-cap index edged up 0.06 per cent, while midcaps traded weaker.

Meanwhile, foreign institutional investors remained bullish, purchasing Indian equities worth ₹1,246.48 crore on a net basis, exchange data showed.

(With inputs from PTI)