Rupee extends gains for 2nd day; closes up by 7 paise at 74.66 against US dollar

The dollar index, which gauges the greenback's strength, rose 0.20% to 90.98

The rupee appreciated by 7 paise to close at 74.66 (provisional) against the US dollar on Tuesday on the back of positive domestic equities.

At the interbank forex market, the local unit opened at 74.65 against the greenback and witnessed an intra-day high of 74.51 and a low of 74.73.

It finally ended at 74.66 against the American currency, registering a rise of 7 paise over its previous closing. On Monday, the rupee had settled at 74.73 against the American currency.

"Indian rupee continues the upward momentum started on Monday on upbeat risk sentiments," said Dilip Parmar, Research Analyst, HDFC Securities.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.20 per cent to 90.98.

"Dollar is treading water before the Fed meeting outcome later tonight. The Federal Reserve will remain accommodative at its meeting despite robust growth and think of trimming its USD 120 billion in monthly asset purchases at end of the year," Parmar said.

He further noted that "we could see month end adjustment tomorrow and USDINR likely to show 74.50 odd levels while on higher side 75.20 remains strong resistance."

Brent crude futures, the global oil benchmark, rose 0.34 per cent to USD 65.87 per barrel.

On the domestic equity market front, the BSE Sensex ended 557.63 points or 1.15 per cent higher at 48,944.14, while the broader NSE Nifty advanced 168.05 points or 1.16 per cent to 14,653.05.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,111.89 crore on Monday, according to exchange data.