The rupee spurted by 43 paise to close at a more than one-month high of 74.03 against the US dollar on Monday as positive domestic equities and a dovish outlook from the US Federal Reserve helped the local unit extend its winning run for a sixth straight session.
At the interbank forex market, the domestic unit opened at 74.25 against the greenback and witnessed an intra-day high of 73.98 and a low of 74.25 during the day's trade. It finally ended at 74.03 a dollar, the highest closing level since September 27.
"The rupee traded strong as the Fed statement of not being so keen to increase rates early has put pressure on the dollar index and helped the rupee scale higher from lows of 74.60 to 74.00. Going ahead, the range for the rupee can be seen between 74.20-73.75," said Jateen Trivedi, Senior Research Analyst at LKP Securities.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.04 per cent to 94.28.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee appreciated against the dollar on Monday supported by persistent dollar inflows into the IPOs.
"The rupee settled near 74 levels on the back of strong FPI flows into the Paytm IPO as well as a positive trend in the equity markets," said Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
On the domestic equity market front, the BSE Sensex advanced 477.99 points or 0.80 per cent to end at 60,545.61, while the broader NSE Nifty jumped 151.75 points or 0.85 per cent to 18,068.55.
Brent crude futures, the global oil benchmark, rose 1 per cent to $83.57 per barrel.
Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 328.11 crore, according to exchange data.