The rupee appreciated 16 paise to settle at 94.39 (provisional) against the US dollar on Thursday as global crude oil prices continued to slide.
Positive sentiments in the domestic equity markets and a marginally weaker greenback further supported the local unit while FII outflows prevented sharper gains, forex traders said.
At the interbank foreign exchange, the rupee opened at 94.30 against the dollar and traded in the range of 94.13-94.56. It settled at 94.39 (provisional), up 16 paise from the previous close.
The rupee appreciated 21 paise to settle at 94.55 against the US dollar on Wednesday.
“The rupee strengthened on falling commodity prices and softening of the US dollar. Weakness in crude oil prices and positive domestic markets also favoured the rupee,” Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said.
“We expect the rupee to trade with a negative bias on overall strength in the US dollar on hawkish Federal Reserve. However, softening of commodity prices and easing concerns over inflation may support the rupee at lower levels,” Choudhary said, adding that the rupee is expected to trade in the range of 94.20-94.80.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.57, lower by 0.04 per cent.
Brent crude, the global oil benchmark, was trading lower by 1.33 per cent at USD 72.76 per barrel in futures trade.
On the domestic equity market front, Sensex rose 109.25 points to settle at 77,100.47, while the Nifty inched up 34.35 points to 24,056.
Foreign institutional investors offloaded equities worth Rs 1,843.40 crore on a net basis on Wednesday, according to exchange data.