Rupee rises for 3rd day on weaker greenback

Mumbai: The rupee strengthened by 9 paise to close at 74.49 against the US dollar on Tuesday, marking its third straight day of gains on foreign fund inflows and positive domestic equities. Firm crude oil prices, however, capped the gains in the local currency, forex dealers said. At the interbank forex market, the local unit opened higher at 74.49 against the greenback and witnessed an intra-day high of 74.41 and a low of 74.50 during the session.

On Monday, the rupee had settled at 74.58 against the US dollar. In the last three trading sessions, the rupee has appreciated by 22 paise.

"The Indian Rupee appreciated for the third straight session against the dollar, tracking the strength in regional currencies and equities ahead of US inflation data. Flows related to the upcoming IPO aided sentiments. In the international markets, the Dollar Index was flat against a basket of six currencies on Tuesday afternoon ahead of the US inflation data," said Sriram Iyer, senior research analyst at Reliance Securities.

Global oil benchmark Brent crude futures advanced 0.55 per cent to $75.57 per barrel.

Jateen Trivedi, senior research analyst at LKP Securities, said: "The rupee traded strong on the back of strong capital markets, along with soft dollar index prices, helping rupee to touch above 74.50. Crude prices can spoil the party for the rupee going ahead if the OPEC+ oil production outcome stays overhang. The range for rupee can be seen between 74.30-74.75 in the session ahead."

Dilip Parmar, research analyst, HDFC Securities, adds that "Indian rupee appreciated following risk on sentiments and strong foreign fund inflows. The rupee is expected to trade with positive bias in the coming days amid favourable inflows, the weaker dollar index, and lower virus cases. Spot USDINR is expected to trade in the range of 74.10 to 74.80 in the near term."