The rupee snapped its three-day losing streak to close 10 paise higher at 73.50 against the US dollar on Thursday following recovery in the domestic equities and losses in the dollar in overseas markets ahead of the European Central Bank's policy meeting, PTI said.
After opening lower at 73.77, the rupee had dropped to a low of 73.85 in day trade due to higher oil prices.
However, the local unit recovered from lows following gains in equities and the US dollar reversing its three-day rise in overseas markets.
The rupee ended at 73.50, registering a rise of 10 paise over its previous closing. In the previous session, the rupee had settled at 73.60 against the US dollar.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd., said, "The first half saw the spot rupee touched a high of 73.85 before settling lower at close near 73.50 levels against the dollar. Risk off in Asian equities pushed the rupee against the dollar higher. However, selling by exporters and FPI inflows capped the advance. Over the next week, we expect the rupee to operate within a range of 73.20 and 74.00 levels on spot.
"The local unit had briefly weakened to an intraday low of 73.85, its lowest in almost two weeks, but recouped losses on exporters’ dollar sales and corporate greenback flows," Sriram Iyer, Senior Research Analyst at Reliance Securities said told PTI.
On weekly basis, the rupee declined by 0.66 per cent or 48 paise as the dollar recovered from its month's low levels.
For the week, the rupee was weak against the US dollar on importer hedging and a consistent rise in the dollar index, Iyer said.
"Rupee gained strength from higher levels near 73.85 as profit-booking by bulls in USD-INR near and before 74.00 levels, helping rupee cover 0.30 points from a high point.
"Positive trigger on vaccine drive along with LIC IPO updates kept positive movement with liquidity on Equities. Rupee range ahead can be seen between 73.40-74.80," said Jateen Trivedi, Senior Research Analyst at LKP Securities.
Emerging market and Asian currencies were mixed ahead of the ECB meeting later in the day.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.11 per cent to 92.54, cutting short its three-day rising streak.
The dollar's major rival Euro rose on expectations that the ECB may announce a cut in its pace of bond buying at the policy meeting.
Brent crude futures, the global oil benchmark, rose 0.29 per cent to $72.81 per barrel.
On the domestic equity market front, the BSE Sensex ended 54.81 points or 0.09 per cent higher at 58,305.07, while the broader NSE Nifty advanced 15.75 points or 0.09 per cent to 17,369.25.
Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 802.51 crore, as per exchange data.
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