Indian Rupee Roars Back From Brink of Record Low on US Trade Hopes

The Indian rupee gained the most in nearly four months, rebounding from near a record low, on hopes of a trade deal with the US.

The currency rallied as much as 0.9%, the biggest jump since June 24, to 87.9987 per dollar on Wednesday before paring some gains. It had weakened to 88.8025 per dollar to near its record low in the previous session.

The rupee gained after Bloomberg News after market hours on Tuesday that India is fast-tracking trade talks with the US with the goal of concluding negotiations by next month. A drop in the US dollar on bets for interest rate cuts by the Federal Reserve also supported the rupee along with most Asian currencies.

The Reserve Bank of India’s recent interventions at the 88.80 level also suggest that in the near-term the central bank doesn’t want rupee to weaken “too much too fast,” said Michael Wan , senior currency analyst at MUFG Bank.

“The combination of some hopes of a trade deal, continued pushback by the RBI and also the broader weaker dollar environment have helped,” said Wan. If the rupee gains past the 88.10 per dollar mark sustainably, it could head toward the 87 mark, he said.