Mumbai, Nov 6 (PTI) The Indian rupee strengthened for the second straight day and settled 28 paise higher at 74.08 against the US dollar on Friday supported by gains in domestic equities and expectation of Joe Biden's victory in the US presidential election.
Weakness in American currency against its key rivals and significant foreign fund inflows also boosted investor sentiment, traders said.
At the interbank forex market, the domestic unit opened at 73.99 against the US dollar and touched an intra-day high of 73.87 and a low of 74.28. It finally closed at 74.08 against the greenback, registering a rise of 28 paise over its previous close.
On Thursday, the rupee gained 40 paise to end at 74.36 against the US dollar.
'Indian rupee continued its positive momentum for second day in trot following weaker dollar, higher equities and expectation of foreign fund inflows,' said Devarsh Vakil, Deputy Head Retail Research, HDFC Securities.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.16 per cent down at 92.37.
'Dollar index came under pressure after Fed Chair Jerome Powell opened the door to a possible shift in the central bank’s bond purchases in coming months, saying that more fiscal and monetary support are needed,' Vakil added.
On a weekly basis, the Indian rupee gained 2 paise.
'The Indian rupee appreciated against the US dollar on Friday and for a fourth straight week, as the dollar index remained choppy and volatile amid uncertainty over the outcome of the US presidential election,' said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Democratic leader Joe Biden appeared to be a step away from winning the US presidential election as the latest count of votes from a handful of battleground states indicated that the re-election chances of incumbent Republican President Donald Trump are getting slim by the hour.
'All eyes will be on who wins Senate on top of House of representatives, as investor are worried that if there is divided government than it will be difficult for passing any legislation, however a clear win of Biden will support the bullish sentiments in the Indian rupee,' said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.
By late Thursday night, Biden -- who bagged 253 seats as against Trump's 213 -- appeared to be nearing the magical figure of 270 out of the 538 electoral college votes.
'A Biden presidency would mean a softer trade policy than that of the current regime under President Donald Trump and bigger economic support measures for financial markets, which may encourage the sentiment for emerging market assets, including the Indian currency,' said Ankit Agarwal, Managing Director, Alankit Limited.
On the domestic equity market front, the 30-share BSE index ended 552.90 points or 1.34 per cent higher at 41,893.06 and the broader NSE Nifty surged 143.25 points or 1.18 per cent to 12,263.55.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 5,368.31 crore on Thursday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 2.27 per cent to USD 40 per barrel. PTI DRR ANS ANS