Mumbai: The rupee appreciated by 7 paise to settle at a fresh one-month high of 70.85 against the US dollar on Wednesday on the back of firm domestic equities and easing crude oil prices, extending its winning run for the sixth straight session.
Forex traders said the domestic unit gained ground ahead of the release of key macro-economic numbers on Thursday.
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At the interbank foreign exchange market, the rupee opened at 70.87 against the US dollar. During the day, the domestic unit fluctuated between a high of 70.74 and a low of 70.94.
The local unit finally settled the day at 70.85, up 7 paise over its last close. The rupee had settled at 70.92 against the US dollar on Tuesday.
"Rupee continued to trade higher against the US dollar ahead of the important inflation and industrial production number that will be released tomorrow. Expectation is that the number could disappoint and could keep gains capped for the currency," Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services Private Ltd.
Somaiyaa further said, "Volatility could also be confined ahead of the important FOMC and ECB policy statement that will be important to trigger a move for the dollar that has been consolidating in a narrow range. We expect the USDINR to quote in the range of 70.70 and 71.20(Spot)."
Brent crude, the global oil benchmark, eased 0.65 percent to $63.92 per barrel in futures trade.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 366.79 crore on Tuesday, provisional exchange data showed.
Forex traders said investors were optimistic about the US-China trade talks.
According to a media report, the US and Chinese officials are working on a deal to postpone tariffs set to hit Chinese imports from December 15.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.11 percent to 97.51.
The 10-year government bond yield was at 6.76 percent.
On the domestic markets front, after swinging nearly 330 points, the index finished 172.69 points or 0.43 percent higher at 40,412.57. Similarly, the 50-scrip NSE Nifty appreciated 53.35 points or 0.45 percent to close at 11,910.15.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.8962 and for rupee/euro at 78.4575. The reference rate for rupee/British pound was fixed at 93.2739 and for rupee/100 Japanese yen at 65.27.
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Updated Date: Dec 11, 2019 17:48:47 IST