The Indian rupee demonstrated remarkable strength today, appreciating by 25 paise to provisionally close at 87.84 against the U.S. dollar. This upward movement was driven by a combination of positive trends in domestic stock markets and growing optimism surrounding ongoing trade negotiations between the U.S. and India.
Forex traders noted that this marks the fourth consecutive session of gains for the Indian currency, propelling it to its strongest level in two and a half weeks. The rupee’s ascent is largely attributed to a broad-based weakening of the American dollar, stemming from market expectations of an impending interest rate cut by the U.S. Federal Reserve.
Investors are keenly observing the Federal Reserve’s upcoming policy decision, as a globally softer dollar tends to bolster the rupee’s position. The market is broadly anticipating a 25-basis point rate cut, and particular attention will be paid to the Fed chair’s speech for any additional forward guidance on monetary policy.
In the interbank foreign exchange market, the rupee commenced trading at 87.84. It fluctuated between an intraday low of 87.71 and a high of 87.86 before settling at its provisional closing rate of 87.84, securing a gain of 25 paise from its previous close.
Just yesterday, on September 16, 2025, the rupee had already gained 7 paise, closing at 88.09 against the U.S. dollar, indicating a consistent upward trajectory.
Anuj Choudhary, a research analyst in currency and commodities at Mirae Asset ShareKhan, commented on the outlook: “We anticipate the rupee will continue to strengthen, supported by the ongoing weakness in the U.S. dollar leading up to the FOMC meeting decision. Markets are factoring in a 25-bps rate cut.” He added that any indications of dovish commentary from the Fed could lead to further declines for the U.S. dollar, thereby improving global risk sentiment.
Globally, the dollar index, which measures the dollar’s performance against a basket of six major currencies, saw a marginal increase of 0.16% to 96.78. Meanwhile, Brent crude, the international oil benchmark, was trading slightly lower by 0.66% at $68.02 per barrel in futures trading.
On the domestic equity front, the Sensex advanced by 313.02 points, settling at 82,693.71, while the Nifty rose by 91.15 points to reach 25,330.25. Foreign Institutional Investors (FIIs) were net buyers in the equity market yesterday, purchasing shares worth ₹308.32 crore, according to exchange data.
In related news, the U.S. government positively characterized its recent trade talks with India. Discussions between U.S. chief trade negotiator Brendan Lynch and his Indian counterpart Rajesh Agrawal focused on a proposed bilateral trade deal. This development is notable given that relations between New Delhi and Washington had previously been strained, particularly after former U.S. President Donald Trump imposed significant tariffs, including a 50% hike on certain Indian goods and additional duties on India’s purchase of Russian crude oil.