The Indian rupee strengthened by 29 paise to close at 92.85 (provisional) against the US dollar on Friday, supported by a weaker American currency and declining crude oil prices amid rising optimism over easing geopolitical tensions.
Forex traders said renewed buying in domestic equity markets and fresh foreign fund inflows also lent support to the local unit. At the interbank foreign exchange market, the rupee opened at 92.93 against the greenback and touched an intraday high of 92.65. It later slipped to a low of 92.98 before settling at 92.85 (provisional), marking a gain of 29 paise from its previous close.
On Thursday, the rupee had appreciated by 19 paise to end at 93.14 against the US dollar. Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee gained strength on the back of improving global risk sentiment. He noted that global markets rallied while the US dollar weakened due to reduced demand for safe-haven assets, alongside a decline in crude oil prices overnight.
“We expect the rupee to trade with a positive bias, supported by expectations of a second round of talks between the US and Iran, as well as the ongoing ceasefire between Israel and Lebanon,” Choudhary said. He added that the USD-INR spot rate is likely to move within a range of Rs 92.50 to Rs 93.20.
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Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six major currencies, slipped 0.12 per cent to 97.90.
Global oil benchmark Brent crude was trading 3.23 per cent lower at USD 96.18 per barrel in futures trade.
Analysts said crude prices declined after Donald Trump expressed optimism about a possible agreement with Iran, easing concerns over prolonged supply disruptions.
In the domestic equity market, the BSE Sensex rose 504.86 points, or 0.65 per cent, to settle at 78,493.54, while the Nifty 50 gained 156.80 points, or 0.65 per cent, to close at 24,353.55.
Foreign Institutional Investors (FIIs) turned net buyers on Thursday, purchasing equities worth Rs 382.36 crore, according to exchange data.
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