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Rupee extends gains for 3rd straight session, up 12 paise at 71.72 a dollar

Mumbai: The Indian rupee continued its winning momentum for a third session in a row on Friday, rising 12 paise to settle at 71.72 against the US dollar as signs of easing trade tensions between the US and China enthused investors.

On a weekly basis, the domestic currency, however, lost 30 paise to the US dollar.

The Indian currency has appreciated by 67 paise in the last three trading sessions.

At the interbank foreign exchange market on Friday, the local unit opened on a strong note at 71.87 and finally closed at 71.72, higher by 12 paise over its previous close.

During the day, the domestic unit shuttled between a high of 71.59 and low of 71.89 during the day.

The rupee had settled at 71.84 against the US dollar on Thursday. In a major boost to investor sentiment globally, China and the US have agreed to hold the next round of trade negotiations in Washington in early October to end the bruising trade war.

"Indian rupee appreciates for the third day in row as risk appetite is back with US-China trade optimism. Strong Equity markets across Asia and weakened US dollar overseas have been supporting the rupee," said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.

Sharma further said that USD/INR is expected to gain in coming holiday truncated week with downside support at 71.40 and resistance at 72.25.

Forex traders said the Indian currency gained following easing crude oil prices. Brent crude futures, the global oil benchmark, fell 2.23 per cent to trade at USD 59.59 per barrel.

Market participants, however, said sustained foreign fund outflows and strengthening of the American currency weighed on the local currency.

Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 561.17 crore on Thursday, according to provisional exchange data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.09 per cent to 98.49.

The 10-year government bond yield was at 6.60 per cent on Thursday.