The rupee opened 14 paise higher at 70.20 against the US dollar on Thursday. Minutes later, the currency slipped further to 70.27.
The domestic unit trimmed its early sharp gains to settle 8 paise higher at 70.06 on Wednesday, mainly due to dollar buying by importers in the last hour of trade.
On the global front, oil prices fell in early trade after soaring 8 per cent in the previous session.
The dollar-rupee January contract on the NSE was at 70.21 in the previous session. January contract open interest increased 36.90 per cent in the previous session, notes ICICI Direct Research in its daily currency note. "We expect the US$/INR to find supports at lower levels. Utilise down sides in the pair to initiate long positions," says the brokerage firm.
"Rupee consolidated in a narrow range for the third successive sessions despite volatility in major global and domestic equities. In the last few sessions the USDINR pair consolidated in range of 69.70 and 70.30(spot) and we expect that this range could still be holding. But one of the primary reasons for rupee gaining has been lower crude oil prices," said Gaurang Somaiya, Research Analyst(Currency) at Motilal Oswal Financial Services. Today, USD/INR pair is expected to quote in the range of 70.20 and 70.80.
In the equity market, shares in Asia rose on Thursday morning following an overnight surge in stocks on Wall Street, with all three major indexes stateside posting gains of more than 4.9 per cent. Japan's Nikkei 225 surged 3.38 per cent in morning trade while the Topix jumped 3.94 per cent as the two indexes climbed for the second-straight day after their Christmas Day tumble, reported CNBC.
Back home, the equity benchmarks Sensex and Nifty rose nearly 1 per cent in the opening deals.