Indian rupee surges against dollar, touches 20.16 against UAE dirham

The rupee strengthened by 44 paise to 73.92 against the US dollar in opening trade on Friday, supported by foreign portfolio flows even as investors continued to wait for the outcome of the US elections.

Traders said positive domestic equities and expectation of Joe Biden's victory in the US presidential election supported the local unit.

At the interbank forex market, the domestic unit opened at 73.99 against the US dollar, then gained further ground and touched 73.92, registering a rise of 44 paise over its previous close. The rupee was trading at 20.16 at 10.57am (UAE time) against the UAE dirham, according to XE.com.

On Thursday, the rupee gained 40 paise to end at 74.36 against the US dollar.

"The US dollar has been badgered as Joe Biden closed in on a victory and the US Federal Reserve reiterated its commitment to keeping the policy stance accommodative until its target of getting the inflation to overshoot 2 per cent moderately for sometime is achieved," said Abhishek Goenka, Founder and CEO, IFA Global.

Goenka further said that "overall risk sentiment is upbeat. A Biden White House would bring more stability and reduce uncertainty in foreign policy as well as domestic policy; and therefore, though it seems like the Republicans are on course to retain control of the Senate, investors do not seem to be too bothered about it at this stage".

Reliance Securities in a report said that the uptick in the rupee was supported by foreign portfolio flows. "We could see Reserve Bank of India's presence in the market today to curb volatility," it added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.12 per cent up at 92.63.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 235.46 points higher at 41,575.62 and broader NSE Nifty surged 66.45 points to 12,186.75.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 5,368.31 crore on Thursday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 2.39 per cent to USD 39.95 per barrel.