Mumbai: The rupee appreciated by 5 paise to close at 75.54 against the US dollar in range-bound trade on Wednesday, extending gains for a fifth straight session helped by firm domestic equity markets.
Lower crude prices in the international market and a subdued dollar overseas also supported the local unit, forex dealers said.
The rupee resumed higher at 75.56 per dollar against the previous close of 75.59 at the interbank foreign exchange market and hovered in a range of 75.48 to 75.65 before settling at 75.54, registering a rise of 5 paise.
“Rupee continued its northbound journey for the fifth day in a row following the rebound in risk sentiments and dollar selling from exporters. The market has also started pricing quarter and year-end rebalancing, which may bring some extra dollar inflows.
“Spot USD/INR is expected to trade in the range of 75.10 to 75.70 in next couple of days ahead of the Christmas holiday. The bias for pair remains slightly lower amid a recovery in risk assets and the lower dollar index,” Dilip Parmar- Research Analyst, HDFC Securities, said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.04 per cent at 96.45.
Brent crude futures, the global oil benchmark, fell 0.26 per cent to USD 73.79 per barrel.
“Crude and dollar prices traded muted, and secondary capital markets performance helped the rupee gain as capital markets showed strength for the last two days. Going ahead rupee can be seen between the 75.35-75.85 range,” Jateen Trivedi, Senior Research Analyst at LKP Securities said.
Emkay Global Financial Services in a note stated that after last week’s central bank policies, there are hardly any positive surprises left for the USD/INR spot.
“Omicron continues to be a cloud of uncertainty and unless there is no sharp rise in death cases, it can be looked past. The focus will be on the upcoming US PCE release, a stronger-than-expected PCE report will ignite further buying interest.”
However, the upside in USD/INR spot will be capped by RBI intervention.
On the domestic equity market front, the BSE Sensex ended 611.55 points or 1.09 per cent higher at 56,930.56, while the broader NSE Nifty surged 184.60 points or 1.1 per cent to 16,955.45.