Rupee Surges 1.5% Against Dollar, Breaks 8-Year Record; FII Return Expected

• The Indian Rupee closed at 90.27 per dollar on Tuesday, marking a three-week high and a 1.5% appreciation.
• This 1.48% gain on February 3, 2026, is the third largest intraday gain for the rupee since 2014, and the biggest single-day gain since December 2018.
• A key factor for the rupee's strength is the India-US trade deal, which reduced reciprocal tariffs on Indian products to 18%.
• Forex experts believe the tariff cut could encourage Foreign Institutional Investors (FIIs) to return to Indian markets.
• The market will now monitor the RBI's strategy to manage the rupee's appreciation and its impact on exports.

Why It Matters: The rupee's significant surge, driven by a US trade deal, signals potential FII return and RBI intervention.