Rupee snaps 3-day losing streak, gains 70 paise to settle at 85.25 against US dollar

Mumbai: The rupee snapped its three-day losing streak and settled for the day higher by 70 paise at 85.25 (provisional) against the US dollar on Friday (May 23), on a sharp fall in the dollar index and surge in domestic equities, amid rise in risk appetite for riskier assets.

Forex traders said, the rupee which had lost 53 paise in the last three trading sessions, settled with significant gains on Friday largely supported by the weakness of the American currency in the overseas market.

However, a slight recovery in crude oil prices and foreign fund outflows capped the appreciation bias in the local unit to some extent.

At the interbank foreign exchange market, the rupee witnessed heavy volatility. It opened at 85.95 then touched an intra-day high of 85.11 and a low of 86.10 against the US dollar.

The domestic unit settled for the day at 85.25 (provisional), higher by 70 per cent over its previous close.

On Thursday, the rupee depreciated 36 paise to close at 85.95 against the US dollar.

"We expect the rupee to trade with a positive bias on underlying weakness in the US dollar index and improved global risk sentiments. However, selling pressure from foreign investors may cap sharp upside movement," said Anuj Choudhary - Research Analyst at Mirae Asset Sharekhan.

Choudhary further noted that traders may take cues from existing home sales data from the US. "USD-INR spot price is expected to trade in a range of 85 to 85.70," he said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.60 per cent at 99.36, on rise in risk appetite in global markets and strength in riskier currencies. Easing of US treasury yields also pressurised the greenback.

Brent crude, the global oil benchmark, fell 0.22 per cent to USD 64.30 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex advanced 769.09 points, or 0.95 per cent, to close at 81,721.08, while the Nifty rose 243.45 points, or 0.99 per cent, to 24,853.15.

Foreign institutional investors (FIIs) offloaded equities worth Rs 5,045.36 crore on a net basis on Thursday, according to exchange data.