Rupee touches 7-wk high of 73.57 vs US dollar

Mumbai: The rupee strengthened by another 3 paise to mark its seven-week high of 73.57 against the US dollar on Wednesday, with sustained foreign fund inflows and firming domestic equities lending support.

Traders said weakening of the American currency in the overseas market also favoured the local unit. At the interbank forex market, the domestic unit opened at 73.58 against the US dollar and witnessed an intra-day high of 73.49 and a low of 73.61.

The local unit finally closed at 73.57 against the American currency, registering a rise of 3 paise - its highest level since October 22. On Tuesday, the rupee surged by 30 paise to settle at a one-and-a-half month high of 73.60 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.24 per cent down at 90.74.

"Asian currencies were broadly higher and India's equities rose this Wednesday and lent support to the currency markets this Wednesday," said Sriram Iyer, Senior Research Analyst at Reliance Securities. Dollar index remained weak this Wednesday afternoon trade weighed down by optimism that the global economy could make a robust recovery in 2021 supported by hope surrounding the coronavirus vaccines and accommodative monetary policies by central banks, Iyer said.

On the domestic equity market front, the BSE Sensex ended 494.99 points or 1.09 per cent higher at 46,103.50, while the broader NSE Nifty jumped 136.15 points or 1.02 per cent to 13,529.10. Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 3,564.23 crore on Wednesday, according to exchange data.

Brent crude futures, the global oil benchmark, rose 1.06 per cent to $49.36 per barrel. Markets will look ahead to Thursday's the European Central Bank which is likely to expand the stimulus programme, traders said.