Rupee erases gains but trades higher at 74.14 per dollar

Indian rupee erased some of the early gains but trading higher at 74.14 per dollar, amid buying seen in the domestic equity market.

It opened 39 paise higher at 73.99 per dollar against previous close of 74.38.

At 12:49 IST, the Sensex was up 406.97 points or 0.98% at 41747.13, and the Nifty was up 102.60 points or 0.85% at 12222.90.

"Rupee opened higher Thursday on likely inflows into local stocks amid a weak dollar. Likely inflows into stocks and weak dollar is supporting rupee at the moment with little speculation surrounding the US election outcome but Biden leading the votes and hopes of Stimulus keeps funding in markets positive. 74.80-75.05 will keep acting at supply where as 74.00-73.80 as support for USDINR pair," said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.

The dollar nursed losses against many currencies on Friday as a contentious US presidential election diminished hopes for large stimulus to support the economy any time soon.

 US oil fell nearly 1% on Friday as new lockdowns went into affect in Europe raising questions over the outlook for demand for crude, while ballots were still being counted in the US election with its outcome undecided, keeping markets on edge.

"Rupee rose for the second successive session following gains in domestic and global equities and weakness in the dollar against its major crosses. Early polls suggest that Joe Biden could be leading the race but market participants will be awaiting for more clarity on the same," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

"Today, focus will be on the FOMC policy statement and expectation is that the central bank could maintain a dovish stance and that could keep the greenback weighed down. In the next couple of sessions we expect the rupee to quote in the range of 73.80 and 74.40," he added.