The Indian Rupee opened 75 paise stronger at 84.65 against the US Dollar on Tuesday, following its previous close at 85.38 a dollar on Friday, according to Bloomberg.
The trading range for the day is expected to be between 84.50 and 85.25, as per Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
He said, Exporters are likely to wait before hedging, while importers may consider hedging closer to 84.25.
The US dollar maintained its gains following a significant trade pact between the US and China, which aims to ease the trade war that has been a source of global economic concern. The agreement to reduce tariffs for 90 days has sparked a relief rally across global markets, boosting stocks and strengthening the dollar. This deal exceeded market expectations and demonstrated the US administration's awareness of the economic impact of tariffs, Bhansali noted.
In other currency movements, the yen was at 147.91, the euro at 1.1104, and the dollar index at 101.64. The US 10-year Treasury yield rose to 4.4530%, while Sterling was at 1.3184. Bhansali also said that the de-escalation of trade tensions has led traders to scale back expectations of further rate cuts by the Federal Reserve, as policymakers may be less inclined to ease monetary policy to support growth.
Brent oil prices increased to $64.74 following the US-China agreement to reduce peak tariffs to 30% and 10%, respectively, fostering optimism that the trade war between the world's two largest economies may be nearing an end, Bhansali said.
The Dow and S&P indices surged by about 3%, while the Nasdaq rose by 4.35%. In Asia, the Nikkei was up by 1.66% this morning, the Hang Seng was down by 1.42%, and China saw a slight increase of 0.13%. The Gift Nifty remained almost flat. Asia-Pacific markets traded mixed this morning after the significant rally on Wall Street.
Among currencies, the CNH gained to 7.18176, the IDR was lower at 16641, and the KRW moved higher to 1,413.00. Gold prices fell to $3,239.50 per ounce, while silver dropped to $32.95 per ounce amid trade optimism.
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