Forex traders said that despite the positive sentiment following the India-US trade deal, there is still caution as there is no signed or officially released trade deal yet – no framework or definitive documentation.
At the interbank forex market, the rupee opened at 90.35 against the US dollar before losing ground and falling to 90.54, a loss of 22 paise over the previous close.
On Tuesday, the Indian rupee emerged as the best-performing Asian currency, posting a record gain of 117 paise or 1.28 percent in one trading session to settle at 90.32 against the US dollar after India and the US signed a trade deal.
“After Tuesday’s good news, the rupee bounced back and weakened as the RBI bought dollars towards the end to take the greenback to 90.2650,” said Anil Kumar Bhansali, Head of Finance and Executive Director, Finrex Treasury Advisors LLP.
Forex traders said investors are trading cautiously as the India-US trade deal is still awaiting formalization.
“Any sustained turnaround in FII flows will depend on greater clarity around the ultimate structure and obligations within the deal,” said CR Forex Advisors MD – Amit Pabari.
President Trump stated that India will end purchases of Russian crude oil within an indefinite timeline, while increasing imports of US energy, including oil and coal, and possibly Venezuelan crude with US approval.
“Moving away from competitively priced Russian oil could be challenging for India given its long-standing commercial and strategic ties with Moscow, and could impact India’s energy costs and external balance,” Pabari added.
According to Pabari, the 89.80-90.00 zone should act as strong support. “Ultimately, the direction for the rupee will depend on the confirmation of the final trade deal and its details. That clarity will determine whether this move continues – or pauses for consolidation,” he said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02 percent lower at 97.41.
Brent crude, the global oil benchmark, was 0.65 percent higher at $67.77 per barrel in futures trading.
In the domestic equity market, Sensex rose 68.49 points to 83,816.96 in early trade, while the Nifty rose 51.90 points to 25,779.45.
Foreign institutional investors bought shares worth ₹5,236.28 crore on Tuesday, according to stock market data.
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Published on February 4, 2026
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