Rupee strengthens on RBI support and manufacturing increase, dollar gains, Fed signals, and worldwide trade concerns.

The Indian rupee gained from possible Reserve Bank of India (RBI) actions and a rise in the dollar index after losing for three days. The rupee pulled down from record levels on Tuesday, opening 39 paise higher against the US dollar at 88.39, its highest beginning since October 15 of this year. This was likely because of central bank support.

Amit Pabari, managing director of CR Forex Advisors, stated that the strength of the dollar provided little place for emerging market currencies, therefore on Monday the rupee dropped back into 88.80, the same range it was in early October. Also, the US Federal Reserve's hawkish signals and Washington's recent trade agreement with China increased the dollar's dominance, leading the world to become concerned once again.

According to data compiled by S&P Global, the Manufacturing Purchasing Managers’ Index (PMI) increased to 59.2 from 57.7 in September, suggesting that India's manufacturing sector continued to rise in October. Strong consumer confidence, attempts to reduce the goods and services tax (GST), rises in productivity, and increased investments in technology all added to the recovery. Anil Kumar Bhansali, executive director and head of treasury at Finrex Treasury Advisors LLP, specified that yesterday's absence of discussion on the India-US trade agreement left the rupee weak.

The dollar index increased and reached a three-month high on decreased expectations of a Fed rate reduction in December. At 99.90, the value of the US dollar against a basket of six major currencies was up 0.03%. Due to traders' responses to the OPEC+ pause in production rises in the initial quarter of the next year, crude oil prices were on the lower side of commodities. The price of WTI crude increased by 0.34% to 60.84 per barrel, while the price of Brent crude dropped by 0.32% to 64.68.