MUMBAI, Feb 5 (Reuters) - The Indian rupee ended modestly higher on Thursday, shored up by foreign banks' dollar sales and traders cutting intraday short bets while companies' demand to hedge their dollar exposures kept a lid on gains.
The rupee closed at 90.3550 per dollar, up 0.1% from the previous session. The currency hit a peak of 90.0750 during the session but was unable to rise past the 90 handle as importers stepped in to pick up dollars.
Traders said stop losses were hit on wagers on the rupee falling once the currency advanced over 90.20 to the dollar.
Asian currencies fell slightly while regional stocks, including India's benchmark Nifty 50, declined as worries over the rising costs of AI investment jolted risk appetite.
"A more difficult equity environment would typically see a flight from risk and a flight from procyclical currencies into the dollar. That is what is probably lending the dollar a little support this week," analysts at ING said in a note.
The dollar index was up 0.1% at 97.8.
Later in the day, the focus will turn to central bank decisions in Europe and England with no change in policy rates anticipated by either of the central banks.
The Reserve Bank of India, too, is expected to keep rates unchanged at its monetary policy meeting on Friday, after India clinched a trade deal with the U.S.
"We maintain our view that the RBI is at the end of the easing cycle and will keep policy repo rate unchanged in CY26 at 5.25% as downside risks to growth have incrementally receded," analysts at Goldman Sachs said in a note.
(Reporting by Jaspreet Kalra; Editing by Rashmi Aich, Harikrishnan Nair and Mrigank Dhaniwala)
By Jaspreet Kalra
