The Indian Rupee saw an impressive appreciation of 8 paise, settling at 88.08 against the U.S. dollar on Tuesday, September 16, 2025. This positive movement is largely attributed to ongoing high-level discussions between the United States and India concerning a proposed trade agreement, specifically addressing the impact of recent ‘Trump Tariffs’.
Currency traders noted that the rupee’s strengthening was supported by favorable domestic market conditions and a broadly weaker U.S. dollar. The greenback is currently trading at a two-month low as anticipation builds around the Federal Open Market Committee (FOMC) meeting, which began on Tuesday, and recent disappointing U.S. economic indicators.
During Tuesday’s interbank foreign exchange session, the rupee commenced trading at 88.05. It experienced intraday fluctuations, touching a low of 88.16 and a high of 88.01, before finally closing at a provisional rate of 88.08, marking an 8-paise gain from its previous close.
This follows a similar positive trend on Monday, September 15, 2025, when the rupee had already gained 10 paise, closing at 88.16 against the U.S. dollar.
Anuj Choudhary, a research analyst specializing in currency and commodities at Mirae Asset ShareKhan, commented on the situation: “We anticipate the rupee to maintain its strength, driven by the overall weakness of the U.S. Dollar. This weakness stems from less-than-favorable economic data emerging from the U.S. and a subdued labor market, which has increased expectations for a potential rate cut by the Federal Reserve.”
Mr. Choudhary further elaborated that market participants are largely expecting a 25-basis-point rate cut. Investors will be closely monitoring the Fed Chair’s speech for additional guidance. “A dovish stance from the Fed could lead to a further decline for the greenback, whereas a hawkish tone might trigger a rebound,” he added.
He also advised traders to consider upcoming retail sales and industrial production data from the U.S., emphasizing caution ahead of the FOMC meeting’s decision later in the week. Mr. Choudhary projected the USD/INR spot price to trade within a range of 87.75 to 88.30.
Globally, the dollar index, which measures the U.S. dollar’s performance against a basket of six major currencies, dipped by 0.26% to 97.04. Meanwhile, Brent crude, the international benchmark for oil, was trading slightly lower by 0.28% at $67.25 per barrel in futures markets.
On the domestic equity front, both major Indian indices showed strong performance. The Sensex surged by 594.95 points to close at 82,380.69, while the Nifty advanced 169.90 points, reaching 25,239.10.
Despite the positive currency movement, Foreign Institutional Investors (FIIs) were net sellers on Monday, offloading equities worth ₹1,268.59 crore, according to exchange data.
Crucially, the Chief Negotiators from India and the U.S. have commenced discussions on a proposed trade agreement. These talks aim to resolve existing trade issues, particularly those that have emerged due to the steep tariffs imposed by the previous Trump administration, which have introduced significant uncertainty for exporters.
The American delegation is being led by Brendan Lynch, the Assistant U.S. Trade Representative for South and Central Asia, while Rajesh Agrawal, Special Secretary in India’s Department of Commerce, is heading the Indian negotiating team.