The Indian rupee emerged as the best-performing Asian currency on Tuesday, surging 122 paise, or 1.33%, in a single session to settle at 90.27 (provisional) against the US dollar, buoyed by positive sentiment following the India-US trade deal. 

Forex traders said the rupee climbed to its highest level in nearly two-and-a-half weeks and rallied by around 1.5% after India and the US reached an agreement to lower trade barriers. The deal boosted confidence across financial markets, with domestic equity indices also posting strong gains. 

At the interbank foreign exchange market, the rupee opened at 90.30 against the US dollar and strengthened further to touch an intraday high of 90.05. It later slipped to a low of 90.52 before settling at 90.27, marking a gain of 122 paise from the previous close. 

Market participants attributed the sharp appreciation to a combination of factors, including the trade agreement, a rally in domestic equities, easing crude oil prices and expectations of foreign capital inflows. Benchmark indices surged by around 2.75 per cent during the session, reinforcing positive sentiment. 

Under the India-US trade deal, Washington has agreed to reduce the reciprocal tariff on Indian goods to 18%, a level lower than that applicable to several other exporting nations such as China, Bangladesh, and Vietnam. Traders said the improved tariff outlook has strengthened India’s relative trade position and could support the rupee in the near term. 

The rupee had already gained momentum on Monday, rising 44 paise to close at 91.49 against the US dollar, a day after the presentation of the Union Budget 2026–27. 

Prime Minister Narendra Modi on Tuesday described the India-US trade agreement as a “big decision” that would benefit all sections of the country, asserting that his government consistently works in the national interest. 

Forex traders said the deal could reopen the door for Foreign Institutional Investor (FII) participation. A recovery in capital inflows during calendar year 2026 would help ease pressure on the rupee, they added. 

Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was marginally lower by 0.05% at 97.57. Brent crude, the global oil benchmark, was down 0.14% at $66.18 per barrel in futures trade. 

On the domestic equity front, the BSE Sensex jumped 2,072.67 points to settle at 83,739.13, while the NSE Nifty surged 639.15 points to close at 25,727.55.