Indian Rupee settles 4 paise higher at 76.53 against US dollar

The rupee pared initial losses to settle 4 paise higher at 76.53 (provisional) against the US dollar on Thursday, tracking positive domestic equities.

The appreciation bias in the local unit is likely to be capped in the near term amid strong American currency, inflationary concerns and fears about an aggressive pace of the US rate hikes, traders said.

At the interbank forex market, the rupee opened at 76.60 against the greenback and moved in a range of 76.43 to 76.71 in the day trade. It finally closed at 76.53, registering a rise of just 4 paise over its previous close of 76.57.

On Wednesday, the rupee had settled almost flat at 76.57 against the US dollar.

"Rupee weakened in the first half of the session but rose in the latter half despite broader gains in the dollar. The dollar has been rising on the expectation that the Fed could raise rates at the next week's meeting," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Inflation remains a concern for the central bank and it could continue to hold a hawkish stance.

"Major crosses Euro and Pound continued to remain under pressure against the US dollar. Today's focus will be on the advance GDP number from the US and weaker-than-estimated data could keep gains capped for the dollar," Somaiya said.

On the domestic equity market front, the BSE Sensex ended 776.72 points or 1.23 per cent higher at 57,521.06, while the broader NSE Nifty jumped 206.65 points or 1.21 per cent to 17,245.05.

Brent crude futures, the global oil benchmark, rose 0.23 per cent to USD 105.56 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, surged 0.44 per cent to 103.41.

Foreign institutional investors were net sellers in the capital market on Wednesday, as they offloaded shares worth Rs 4,064.54 crore, as per stock exchange data.