The rupee breached 90-levels against the greenback for the first time on Wednesday (December 3, 2025), falling 6 paise to 90.02 in early trade, as banks kept buying U.S. dollars at higher levels and Foreign Institutional Investors (FIIs) outflows continued.

However, a weaker dollar index and a fall in global crude oil prices cushioned against a steeper decline, according to forex traders.

At the interbank foreign exchange, the rupee opened at 89.96 against the dollar and slipped to a record intra-day low of 90.15 before recovering some ground to trade at 90.02, down 6 paise from its previous close.

On Tuesday (December 2, 2025), the rupee settled 43 paise down at an all-time closing low of 89.96 against the U.S. dollar, largely owing to continued short-covering from speculators and sustained importer demand for the American currency.

“The rupee has been weakening with the Government of India and the Reserve Bank of India (RBI) wanting to help exporters and may have kept the dollar well bid in the past few days,” Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP, said.

“Nationalised banks were buying dollars at higher levels consistently yesterday (December 2, 2025)… There was a deal at 90.0050 after the close of market hours on the trading platform. The stalled India-U.S. trade talks and heavy Foreign Portfolio Investment (FPI) outflows are causing this fall in rupee despite a weakening dollar index,” Mr. Bhansali said.

Mr. Bhansali said the rupee might hit 91 levels in this cycle if the RBI support eases at 90.

The Monetary Policy Committee (MPC) meeting starts on Wednesday (December 3, 2025) and the interest rate decision will be declared on December 5 ahead of the Fed interest rate decision on December 10.

“A rate cut by the RBI could invite further selling of the rupee,” Mr. Bhansali added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.13% lower at 99.22.

Brent crude, the global oil benchmark, was trading 0.03% lower at $62.43 per barrel in futures trade.

On the domestic equity market front, Sensex declined 165.35 points to 84,972.92 in early trade, while Nifty was down 77.85 points to 25,954.35.

Foreign Institutional Investors (FIIs) sold equities worth ₹3,642.30 crore on Tuesday (December 2, 2025), according to exchange data.

The rupee pared its initial gains and settled for the day 1 paisa higher at 86.40 (provisional) against the U.S. dollar on Thursday (July 24, 2025), as risk aversion in global markets and an overnight recovery in crude oil prices dented investors’ sentiments.

Forex traders said uncertainty over the India-U.S. trade deal has been an overhang for the forex market, leaving the rupee trading in a tight range. Moreover, a negative trend in domestic equities and foreign fund outflows weighed on investors’ sentiments and restricted the upmove of the local unit.

At the interbank foreign exchange, the domestic unit opened at 86.33 against the greenback and touched an intra-day high of 86.24 and a low of 86.42.

At the end of Thursday’s trading session, the local unit settled at 86.40 (provisional), higher by 1 paisa over its previous closing price.

On Wednesday, the rupee settled with a loss of 3 paise at 86.41 against the dollar.

“We expect the rupee to trade with a slight negative bias amid geopolitical tensions between Thailand and Cambodia and positive crude oil prices. FII outflows may also weigh on the rupee,” Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan said.

“Optimism over U.S.-EU trade deal and weak U.S. Dollar may support the rupee at lower levels. Traders may take cues from new home sales data from the U.S. and remain cautious ahead of PMI and durable goods orders data from the U.S. this week. Investors may also take cues from ECB’s monetary policy decision. USDINR spot price is expected to trade in a range of 86.10 to 86.75,” Mr. Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.16% to 97.36, as investors watched out for an India-U.S. trade deal ahead of the August 1 deadline.

If the discussions fail or get delayed, Indian exporters could face fresh pressure — adding to the rupee’s challenges.

However, if a deal is reached, it could offer a much-needed breather. Until then, the uncertainty is likely to keep market participants cautious.

Brent crude, the global oil benchmark, went up by 1.18% to $69.32 per barrel in futures trade.

The U.S. team will visit India in August for the next round of negotiations for the proposed bilateral trade agreement between the two countries.

India and the U.S. teams concluded the fifth round of talks for the agreement last week in Washington.

Meanwhile, in the domestic equity market, Sensex fell 542.47 points, or 0.66%, to settle at 82,184.17, while Nifty declined 157.80 points, or 0.63%, to close at 25,062.10.

Foreign institutional investors (FIIs) offloaded equities worth ₹4,209.11 crore on a net basis on Wednesday, according to exchange data.