A positive move in Indian equity indices and stronger Asian currencies helped the sentiment.
Tracking positive domestic equities, the rupee on Friday closed 12 paise higher at 74.30 (provisional) against the US dollar.
In the interbank forex market, the local unit opened at 74.41 against the greenback and clocked an intra-day high of 74.25 and finally ended the day at 74.30, registering a gain of 12 paise over the previous close of 74.42.
Forex traders said while positive moves in Indian equity indices and stronger Asian currencies helped sentiments, Omicron concerns and firming crude oil prices capped the appreciation bias of the local unit to some extent.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.21% to 96.11.
Dilip Parmar, Research Analyst, HDFC Securities, said, “Taking cues from regional currencies, the rupee edged higher against the US dollar. As the markets resumed a jump in virus cases and the Fed’s crunch, riskier assets opened up early shocks and the dollar. After she became weak, she started recovering.”
Mr Parmar further said that the Indian rupee is expected to outperform in the near term following better inflows into the debt market. He said the local currency is likely to fluctuate between 74.10 to 74.50.
Global oil benchmark Brent crude futures rose 0.99% to $82.80 a barrel.
Foreign institutional investors were net sellers in the capital markets on Thursday as they sold shares worth 1,926.77 crore, according to exchange data.
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