Rupee rallies 40 paise to close at 73.29 against US dollar

The rupee surged by 40 paise to close at 73.29 (provisional) against the US dollar on Monday, supported by a firm trend in domestic equities and a weak American currency.

At the interbank forex market, the local unit opened strong at 73.46 against the greenback and later gained strength to settle at 73.29, higher by 40 paise over its previous close of 73.69.

The local unit moved in a range of 73.21 to 73.54 in the day trade.

The rupee logged the third straight session of gain on Monday. In the three trading sessions, the local unit appreciated by 95 paise against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading unchanged at 92.68.

"The Indian rupee continued Friday's upward momentum and became the second-best performing currency among Asian basket," said Dilip Parmar, Research Analyst, HDFC Securities. The weakness in the dollar, a sharp surge in demand for risk assets, and expectations of high dollar inflows in the coming month through FDI and FII routes well-supported the Indian rupee, Parmar added.

"Spot USDINR is expected to head towards a psychological level of 73 once the level of 73.20 breaks and find resistance at 73.65," he noted.

On the domestic equity market front, the BSE Sensex ended 765.04 points or 1.36 per cent higher at 56,889.76, while the broader NSE Nifty advanced 225.85 points or 1.35 per cent to 16,931.05.

Brent crude futures, the global oil benchmark, fell 0.22 per cent to $72.54 per barrel. Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 778.75 crore, as per exchange data.