MUMBAI: Softening dollar and a bullish equity market on the easing geopolitical tension strengthened the rupee Thursday, gaining as much as 40 paise to close at 85.69 to the greenback. A declining dollar index also aided the unit which had closed at 86.09 on Wednesday.
With today’s rally, the rupee has depreciated by just 0.15% so far this month, yet is among the worst-performing currencies in Asia.
The unit opened the day at 85.92 and as the market sentiment improved continued to gain through the session and closed with 40 paise gains at 85.69.
The dollar index dropped sharply to fall below the 97.00-mark as the Israel-Iran ceasefire held on for the second day, a trader said, adding falling crude prices and a weaker dollar provided strong support to the rupee.
The dollar weakened after US president Donald Trump said he was considering an early appointment for the next Federal Reserve chairman. The US dollar index that measures the greenback against a basket of six major currencies (the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc), was down 0.55% at 97.13.
On the equity side, the indices rallied over 1.21% each with the Sensex closing at 83,756, adding 1,000 points and the Nifty scaling to 25,549 adding 304 points.