The rupee closed higher by 26 paise at 73.12 (provisional) against the U.S. dollar on Wednesday and ended the fiscal on a strong note with a gain of over 3% despite coronavirus-induced disruptions on the economic front.
At the interbank forex market, the local unit opened at 73.56 against the greenback and witnessed an intra-day high of 73.05 and a low of 73.58.
It finally ended at 73.12 against the American currency, registering a rise of 26 paise over its previous closing. On Tuesday, the rupee had settled at 73.38 against the American currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.10% to 93.20.
Forex traders said market participants remained cautious as the Indian currency markets will remain shut for the next two sessions. The Indian currency markets will be closed on Thursday and Friday for annual bank closing and Good Friday holiday respectively.
"Despite a truncated week, the forex market has been very volatile. The spot breached 73 on the back of uptrend in dollar. The market focus is on Joe Biden's additional stimulus announcement and an additional spending boost will further support the dollar rally," said Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.
Mr. Gupta further noted that "the best thing to do for now is to follow the trend and let the market tell you where it's going to end. In USDINR spot we expect the trading range to be 72.50-73.50." Meanwhile, Brent crude futures, the global oil benchmark, fell 0.48% to $63.83 per barrel.
On the domestic equity market front, the BSE Sensex ended 627.43 points or 1.25% lower at 49,509.15, while the broader NSE Nifty declined 154.40 points or 1.04% to 14,690.70.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth ₹769.47 crore on Tuesday, according to exchange data.