The rupee surged 53 paise to close at 73.69 (provisional) against the US dollar on Friday, supported by a firm trend in domestic equities ahead of the key speech from US Federal Reserve Chair Jerome Powell.
At the interbank forex market, the local unit opened strong at 74.17 against the greenback, then gained strength and settled for the day at 73.69, higher by 53 paise over its previous close of 74.22.
The local unit moved in a range of 73.69 to 74.20 in the day trade.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd., said, "After over a month of being caught in a narrow range between 74.10 and 74.60, the rupee/dollar broke down. Lumpy corporate dollar flows, rising FPI inflows, and strong sentiments in the equity market caused the sharp slide. The central bank was less aggressive in defending the 74.00 level and that caused stop-loss related selling from option writers. Tonight Jackson Hole symposium will be an event to watch but it may be not enough to turn the tide for the US dollar. Over the next week, the rupee could trade in a range of 73.50-74.10 on spot."
"The Indian rupee marked single biggest day gain after April 16, 2021 on back of month-end rebalancing and foreign fund inflows ahead of the Jackson Hole symposium later tonight," said Dilip Parmar, Research Analyst, HDFC Securities.
The global forex market remained calm ahead of the event while the domestic market took this as opportunity and has given range breakout, Parmar said adding that "the bias for the rupee has turned bullish after today's price action".
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, dipped 0.04 per cent to 93.02.
On the domestic equity market front, the BSE Sensex ended 175.62 points or 0.31 per cent higher at 56,124.72, while the broader NSE Nifty advanced 68.30 points or 0.41 per cent to 16,705.20.
Brent crude futures, the global oil benchmark, increased 1.32 per cent to $72.01 per barrel.
Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 1,974.48 crore, as per exchange data.
(With PTI inputs)
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