Rupee Logs Third Straight Gains, Up 12 Paise To End At 71.73 A Dollar
The Indian rupee continued its winning momentum for a third session in a row on Friday, rising 12 paise to settle at 71.73 against the U.S. dollar as signs of easing trade tensions between the U.S. and China enthused investors.
On a weekly basis, the domestic currency, however, lost 30 paise to the U.S. dollar.
The Indian currency has appreciated by 67 paise in the last three trading sessions.
At the interbank foreign exchange market on Friday, the local unit opened on a strong note at 71.87 and finally closed at 71.72, higher by 12 paise over its previous close.
During the day, the domestic unit shuttled between a high of 71.59 and low of 71.89 during the day.
The rupee had settled at 71.84 against the U.S. dollar on Thursday. In a major boost to investor sentiment globally, China and the U.S. have agreed to hold the next round of trade negotiations in Washington in early October to end the bruising trade war.
"Indian rupee appreciates for the third day in row as risk appetite is back with U.S.-China trade optimism. Strong Equity markets across Asia and weakened US dollar overseas have been supporting the rupee," said VK Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.
Sharma further said that USD/INR is expected to gain in coming holiday truncated week with downside support at 71.40 and resistance at 72.25.
Forex traders said the Indian currency gained following easing crude oil prices. Brent crude futures, the global oil benchmark, fell 2.23 percent to trade at $59.59 per barrel.
Market participants, however, said sustained foreign fund outflows and strengthening of the American currency weighed on the local currency.
Foreign institutional investors remained net sellers in the capital market, pulling out Rs 561.17 crore on Thursday, according to provisional exchange data.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.09 percent to 98.49.
The 10-year government bond yield was at 6.60 percent on Thursday.
On the domestic market front, the 30-share index ended 337.35 points, or 0.92 percent, higher at 36,981.77. Similarly, the broader NSE Nifty settled 98.30 points, or 0.91 percent, higher at 10,946.20.
The Financial Benchmark India Private Ltd. set the reference rate for the rupee/dollar at 71.8611 and for rupee/euro at 79.2091. The reference rate for rupee/British pound was fixed at 87.8861 and for rupee/100 Japanese yen at 67.47.