Maintaining its bullish trend for a third straight day, the rupee today strengthened by another 14 paise to end at a near two-week high of 64.87 against the US currency on sustained dollar unwinding by exporters and banks.
A spectacular relief rally in local equities further supported the forex sentiment amid extreme bearish dollar overseas cues.
Robust capital inflows against the backdrop of solid macro-economic environment also weighed on the currency trade despite mounting expectations that the Federal Reserve will further speed up interest rate hikes this year.
Most Asian currencies were trading higher after signs that the United States can reach an agreement with China over trade tariffs.
Meanwhile, benefiting from a better market mood, stock and currency markets worldwide showed some resilience as sentiments stabilised mildly after last week's savage sell-offs spooked by trade confrontations between the US and China.
The US President Trump imposed huge tariffs on Chinese imports and Beijing retaliated by levying extra tariffs on American imports.
The rupee resumed today on a positive note at 64.93 per dollar against last Friday's close of 65.01 at the inter-bank foreign exchange here.
It traded in a tight range of 64.80 and 64.95 for most part of the day before ending at 64.87, a gain of 14 paise, or 0.22 per cent.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.9055 and for the euro at 80.2557.
Foreign investors and funds infused over Rs 8,400 crore in the Indian equity markets so far in March amid escalating US-China trade tensions.
However, they pulled out nearly Rs 10,000 crore from the debt markets during the period under review, depositories data showed.
On the global energy front, global crude prices traded marginally weak, but losses were capped by a rebound in stock markets and escalating Saudi-Iran tensions.
Brent crude futures were down 10 cents at USD 70.35 a barrel in early Asian trade.
In the meantime, domestic bourses staged a stunning rebound from multi-month lows on the back of frantic short-covering ahead of F&O expiry along with value-buying in beaten-down counters.
The benchmark BSE Sensex shot up 470 points to close at 33,066.41 and Nifty jumped 133 points to 10,130.65.
Though, Asian stock markets remained under pressure with European indices gaining some ground on news of the US seeking the way how to avert the trade war with China.
In the cross currency trade, the Indian unit retreated against the pound sterling to finish at 92.25 from 91.76 and also fell back against the euro to settle at 80.50 as compared to 80.21 earlier.
The home currency, however, gained further ground against the Japanese yen to conclude at 61.72 per yens from 61.91 last weekend.
In forward market today, premium for dollar edged higher due to mild paying pressure from corporates.
The benchmark six-month forward premium payable in August inched up to 117.50-119.50 paise from 116-118 paise and the fag-forward February 2019 contract also gained marginally to 236-238 paise from 232-234 paise previously.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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