The Rupee logged its best day in 7 years on Tuesday after a long-awaited U.S.-India trade deal boosted market sentiment, prompting traders to unwind speculative wagers against the currency alongside a broader rally in local financial markets. While the announcement was scant on details, the breakthrough in negotiations with India's largest trading partner was enough to push the rupee up 1.36% to 90.2650 per dollar, its best one-day gain since December 2018. This comes days after the rupee hit a record low of 91.9875, pressured by firms' hedging their dollar exposure and amid concerns over foreign outflows. One-month non-deliverable forward points and 1-month forward premium both declined, while an adjustment in the 1-month volatility skew signalled that the cost of betting against the rupee via options fell relative to cost of wagering on a rise. Global markets also took comfort from the U.S.-India trade deal which, alongside the resumption of U.S. nuclear talks with Iran, was seen as sign of easing geopolitical tensions. The pound was little changed on Tuesday as a light economic calendar made for steady trading ahead of the Bank of England's interest rate decision on Thursday. Sterling was last trading flat against the dollar at $1.3672, having gained around 1.4% this year on the back of stronger-than-expected economic data. Britain's inflation rate rose more than expected to 3.4% in December, the highest in the Group of Seven most affluent nations, although the BoE expects it will drop to its 2% target by around the middle of the year. It touched a more than four-year high of $1.3867 in late January, aided by a fall in the dollar driven by trade uncertainty and expectations of further U.S. rate cuts. The euro was last flat against the pound at 86.29 pence. It has slipped around 1% against sterling this year. The dollar strengthened against the yen on Tuesday but was backing away from a third consecutive day of broad gains even as positive economic data and shifting expectations for Federal Reserve policy outweighed concerns about another U.S. government shutdown. The dollar index , which measures the greenback against a basket of currencies, was 0.08% lower at 97.45 and retreating from a two-day 1.5% advance. The Aussie surged after the Reserve Bank of Australia delivered its first rate increase in two years, lifting its cash rate by 25 basis points to 3.85%. The central bank also warned about inflation, stoking bets that there would be at least one more increase this year. The Australian dollar was up 0.81% to $0.7004. It rose to its highest level against the yen since 1990, and was last up more than 1.5% to 109.31 yen . The yen got a respite last week after Japanese policymakers hinted at joining with the United States in coordinated action to defend their currency. The dollar was last up 0.14% against the Japanese currency at 155.82 yen , but remained below the 1-1/2-year high of 159.45 yen hit in mid-January. Oil prices edged up on Tuesday after the U.S. shot down an Iranian drone approaching a U.S. aircraft carrier and armed boats approached a U.S.-flagged vessel in the Strait of Hormuz, stoking concerns that talks aimed at de-escalating U.S.-Iran tensions could be disrupted. Brent futures rose 90 cents, or 1.4%, to $67.20 per barrel at 1:04 p.m. EST (1804 GMT), while U.S. West Texas Intermediate crude rose 99 cents, or 1.6%, to $63.13.......