Rupee rises by 4 paise to close at 77.54 against US dollar on stocks rally

The rupee rose further by 4 paise to close at 77.54 against the US dollar on Monday, supported by positive domestic equities and a weak American currency overseas.

Forex traders said the rupee consolidated in a narrow range as elevated crude oil prices weighed on the local unit.

At the interbank forex market, the rupee opened at 77.53 against the greenback and moved in a range of 77.46 to 77.56 in the day's trade.

The rupee finally ended at 77.54, higher by 4 paise over its previous close of 77.58.

"Rupee continued to trade in a narrow range and volatility remained low despite gains in domestic equities. Dollar retraced against its major crosses after core PCE index number came in line with estimates," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

"We expect the USD/INR to trade sideways and quote in the range of 77.20 and 77.80," Somaiya added.

The week started on a positive note for risk assets as softening of the lockdown in China boosted the sentiments, said Dilip Parmar, Research Analyst, HDFC Securities.

Parmar said that a stronger Chinese Yuan and equities supported the rupee on Monday while higher crude oil prices and foreign fund outflows weighed on it.

"Spot USDINR is expected to consolidate in the range of 77.30 to 77.75, he said.

On the domestic equity market front, the BSE Sensex advanced 1,041.08 points or 1.90 per cent to end at 55,925.74, while the broader NSE Nifty jumped 308.95 points or 1.89 per cent to 16,661.40.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.22 per cent to 101.44.

Foreign institutional investors turned net investors in Indian equities as they bought shares worth Rs 502.08 crore on net basis on Monday, according to stock exchange data.

Brent crude futures, the global oil benchmark, rose 0.39 per cent to USD 119.90 per barrel.