Rupee settles 10 paise higher at 74.01 against US dollar

The rupee appreciated by 10 paise to close at 74.01 against the US dollar on Tuesday on sustained foreign fund inflows and positive development over coronavirus vaccine.

Traders said investor risk sentiment improved amid growing hopes of an early rollout and efficacy of Covid-19 vaccines. Besides, strong domestic equities, sustained foreign fund inflows and weak American currency also supported the local unit.

At the interbank forex market, the domestic unit opened at 74.10 against the US dollar and then touched a high of 73.88 and a low of 74.12 in day trade. The local unit finally ended at 74.01 against the greenback, registering a rise of 10 paise over its previous close.

On Monday, the rupee had appreciated 5 paise to settle at more than two-week high of 74.11 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.32 per cent to 92.20.

Pharma major AstraZeneca said on Monday said that an interim analysis of clinical trials of its Covid-19 vaccine in the UK and Brazil showed that it was 70 per cent effective on average, becoming the third drugmaker to announce promising results to contain the deadly virus.

"Indian Rupee appreciated on consistent FII inflows and positive development over coronavirus vaccine. Further, the rupee gained strength on weakness in dollar and rise in risk appetite in the global markets," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

Mukadam further said that "market sentiments improved on optimism over possible early launch of vaccines and as US President Donald Trump said his administration would cooperate with President-elect Joe Biden’s transition to White House".

Besides, risk appetite increased on news that US President-elect Joe Biden plans to nominate former Federal Reserve Chairwoman Yellen as Treasury secretary, he said.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 4,738.44 crore on a net basis on Monday, according to exchange data.

On the domestic equity market front, the 30-share BSE benchmark Sensex closed 445.87 points higher at 44,523.02 while the broader NSE Nifty rose 128.70 points to settle at 13,055.15.

Brent crude futures, the global oil benchmark, rose 0.74 per cent to USD 46.40 per barrel.