Rupee rises on stocks rally

The rupee pared some of its initial gains to settle 5 paise higher at 74.54 against the US dollar on Thursday amid a firm trend in domestic equities. Forex inflows and a correction in the US dollar in overseas markets supported the rupee, while buying of the greenback by banks on behalf of the RBI restricted the rupee gains.

"Indian rupee consolidated in the range of 74.65 to 74.40 for the fifth day in absence of fresh cues. Traders are in dilemma as at one end, risk-on sentiments and dollar inflows are in favour of rupee while on other hand higher crude oil prices and central bank's interventions adding pressure on rupee. Spot USDINR is likely to remain in range of 74.40 to 74.65 for few more days amid dollar inflows and stronger regional currencies," said Dilip Parmar, research analyst, HDFC Securities. At the interbank forex market, the local unit opened at 74.48 against the greenback and witnessed an intra-day high of 74.47 and a low of 74.55 during the session.

"Another lackluster day of trading in USDINR as spot closed lower, as weaker US Dollar Index and FPI flows into the ongoing IPOs kept the USDINR capped under 74.60 on spot but relentless buying of USD from RBI kept the pair above 74.50. We expect USD-INR to come under selling pressure as last day of ZOMATO IPO may see lumpy inflows. However, RBI intervention may prevent any sharp appreciation. We expect a range of 74.30-74.65 on spot," said Anindya Banerjee, DVP (currency derivatives & interest rate derivatives) at Kotak Securities. On Wednesday, the rupee had settled at 74.59 against the US dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.08 per cent to 92.33. On the domestic equity market front, the BSE Sensex ended 254.80 points or 0.48 per cent higher at 53,158.85, while the broader NSE Nifty advanced 70.25 points or 0.44 per cent to 15,924.20.