Dollar vs Indian Currency: According to foreign exchange traders, a positive atmosphere has definitely been created regarding the India-US trade deal, but investors and traders are still being cautious.

Rupee vs Dollar: The Indian rupee failed to maintain its recent strength and fell 16 paise to 90.43 against the US dollar on Wednesday, ahead of the start of the three-day meeting of the RBI's Monetary Policy Committee. The rupee had surged sharply a day earlier following news of the India-US trade deal, gaining nearly 117 paise in early trading. However, this rally proved unsustainable, and caution prevailed in the market the following day.

Why the decline despite the deal?

According to foreign exchange traders, while positive sentiment has certainly developed regarding the India-US trade deal, investors and traders are still exercising caution. The biggest reason for this is that no signed or official document of the agreement has yet been released. Neither its full framework has been made public, nor have the final terms been confirmed. This uncertainty has put pressure on the rupee. The rupee opened at 90.35 in the interbank foreign exchange market, but later weakened to 90.54 per dollar, representing a decline of 22 paise from its previous close.

It's worth noting that after the India-US trade deal was agreed on Tuesday, the rupee recorded a gain of 117 paise, or 1.28 percent, against the US dollar, closing at 90.32. During this period, the rupee emerged as the best-performing currency among Asian currencies. However, as the market realized that the formal and legal aspects of the deal were still pending, profit-booking and caution slowed the rupee's gains.

Positive trend in the stock market

On the other hand, the dollar remained relatively weak on the global front. The dollar index, which measures the greenback against six major currencies, fell marginally by 0.02 percent to 97.41. International crude oil prices rose, with Brent crude oil rising 0.65 percent to $67.77 per barrel.

However, domestic stock markets remained positive. The Sensex gained 68.49 points to 83,816.96 in early trade, while the Nifty rose 51.90 points to 25,779.45. According to stock market data, foreign institutional investors (FIIs) remained confident. Foreign investors (FIIs) were net buyers on Tuesday, purchasing shares worth approximately ₹5,236.28 crore, supporting the market.