Rupee settles 7 paise higher at 71.24 against US dollar tracking positive equities

The rupee on Wednesday appreciated by 7 paise to settle at 71.24 against the US dollar following gains in the domestic equity market.

Forex traders said rupee consolidated in a narrow range as market participants are assessing the economic implications of the coronavirus outbreak and awaiting cues from the Union Budget.

At the interbank foreign exchange market, the local currency opened at 71.23. During the day, the local unit saw a high of 71.17 and a low of 71.29. The domestic unit finally settled at 71.24, up 7 paise from its previous close.

The rupee had settled at 71.31 against the American currency on Tuesday.

"Indian rupee gained as risk sentiment recovered amid a rebound in the global and domestic equities. Market players assessing the economic implications of the coronavirus outbreak," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

Meanwhile, Australian scientists said on Wednesday they have successfully recreated the novel coronavirus in a lab, for the first time outside China, a "significant breakthrough" which they say may help combat the deadly virus that has claimed over 130 lives and infected thousands.

Sharma further said that strong foreign fund flows also supported strength in rupee as they have bought USD 2.21 billion equities so far this month.