MUMBAI : The Indian rupee on Tuesday hit one-month high against US dollar tracking gains in local equity and Asian currencies amid optimism for a trade deal.

The home currency closed at 70.84 a dollar, up 0.06% from Friday's close of 70.89. The Indian unit had opened and touched a high of 70.73 a dollar -- a level last seen on 1 October. Monday markets were closed due to Diwali holiday.

President Donald Trump says US is ahead of schedule to sign a very big portion of the China deal. Federal Reserve will meet on 29-30 October and 40 economists polled by Bloomberg expect the Fed to approve a quarter point reduction.

The yield on the 10-year Indian government bond was at 6.518% compared with its previous close of 6.501%. Bond yield and prices moves in opposite directions.

The benchmark Sensex Index rose 1.48%, or 581.64 points, to close at 39831.84 points. Year to date, it has gained 10.43%.

Among the Asian equity markets, Japan's Nikkei 225 gained 0.47%, Malaysia's FTSE Malay KLCI gained 0.50% and Singapore's Straits Times Index gained 0.36%.

In the year so far, the rupee has weakened 1.51%, while foreign investors have bought nearly $8.71 billion in Indian equities and $3.98 billion in debt.

Asian currencies were trading higher. South Korean won was up 0.63%, Taiwanese dollar 0.15%, Philippines peso 0.11%, Chinese renminbi 0.05%, Japanese yen 0.04%, China offshore 0.02%, Malaysian ringgit 0.01%. However, Singapore dollar was down 0.07%, Indonesian rupiah 0.05% and Hong Kong dollar 0.01%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 97.84, up 0.08% from its previous close of 97.764.