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The rupee gained 2 paise to close at 81.78 (provisional) against the US dollar on May 4 in view of the weakness of the American currency in the overseas market.
Forex traders said significant foreign fund inflows and crude oil prices trading below $75 a barrel also supported the local unit.
At the interbank forex market, the local unit opened higher at 81.68 against the American currency but later pared some gains to settle at 81.78 (provisional), registering a gain of 2 paise over its previous close.
The rupee touched a high of 81.65 and a low of 81.84 against the dollar during the day. On May 3, the rupee had closed at 81.80 against the American currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.04% to 101.30. The US dollar retreated after the Federal Reserve’s latest 25 basis point hike in interest rates signaled a halt to its year-long rate hike cycle.
Global oil benchmark Brent crude futures rose 0.98% to $73.04 a barrel.
Jatin Trivedi, VP Research Analyst, LKP Securities, said that the rupee started the day strong against the dollar, but declined to 81.80 levels during the day.
The dollar index traded in the range of 101.04-101.40 and foreign institutional investors (FIIs) were net buyers.
“Rupee may see a range of 81.50-82.00 after the Fed’s desk indicated an accommodative stance, which may help the rupee to move higher,” said Mr. Trivedi.
On the domestic equity market front, the 30-share BSE Sensex advanced 555.95 points or 0.91% to close at 61,749.25, and the broader NSE Nifty advanced 165.95 points or 0.92% to 18,255.80.
Foreign institutional investors (FIIs) were net buyers in the capital market on Wednesday as they bought shares worth ₹1,338.00 crore, according to exchange data.