Rupee scales near 6-month high of 73.39, zooms 43 paise against USD

The NSE Nifty surged 88.35 points or 0.76 per cent to close at 11,647.60. Traders said the Indian rupee extended gains this Friday against the greenback supported by continuous portfolio inflows and weak US dollar.

The rupee on Friday surged by 43 paise to close at 73.39 to the US dollar, its best closing level in nearly six months, buoyed by sustained foreign fund inflows and weaker greenback against key rivals. At the interbank forex market, the domestic unit opened on a flat note but soon gained strength and finally ended 43 paise higher at 73.39 against the American currency - the best closing level since March 5.

During the day, the local unit touched an intra-day high of 73.29 and a low of 73.87. Also, this was the third consecutive day of gains for the rupee, during which it advanced by 94 paise. On weekly basis, the Indian currency appreciated by 145 paise against the US dollar.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,004.11 crore on Friday, according to exchange data. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.72 per cent to 92.33.

Brent crude futures, the global oil benchmark, fell 0.33 per cent to USD 44.94 per barrel. A sharp appreciation has been witnessed in the rupee amid persistent portfolio inflows and as the domestic currency was eventually seen mirroring the decline in the dollar index, said Sugandha Sachdeva VP-Metals, Energy and Currency Research, Religare Broking.

Sachdeva further said that "in the current scenario, the unfettered money printing drive by major central banks has fuelled the 'risk on' trade in markets even as the COVID-19 crisis rages on". On the domestic equity market front, the BSE Sensex ended 353.84 points or 0.90 per cent higher at 39,467.31. The NSE Nifty surged 88.35 points or 0.76 per cent to close at 11,647.60.

Traders said the Indian rupee extended gains this Friday against the greenback supported by continuous portfolio inflows and weak US dollar. "Rupee marked its best week since 2018 on strong foreign inflows and as the central bank stepped away from dollar purchases…," said Devarsh Vakil, Deputy Head Retail Research, HDFC Securities.

Vakil further said that "dovish signals from the Fed Chairman yesterday helped the risky assets to add gains. The dollar broke the lows that were recorded after Fed Chair Powell's remark on inflation". Going ahead investors now will look to next week's India's gross domestic product data for the April-June quarter which will be released on August 31, traders said.