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During the trading session, the domestic unit witnessed an intra-day high of 73.24 and a low of 73.44.
The local unit finally settled at 73.40, registering a fall of 16 paise over its previous close.
The Rupee is likely to trade in the narrow range of 71-73.5 as traders expect relative stable exchange rate
The Labor Department said nonfarm payrolls decreased by 140,000 in December, the first decline in eight months, well below expectations that called for a still-weak increase of 71,000 jobs.
The surge in the reporting week was mainly on the back of an increase in the value of foreign currency assets (FCA) held by the central bank, which constitutes a major component of the overall reserves.
For a better part of the session, the rupee remained under pressure due to stronger American currency against key rivals and surging crude oil prices, eventually capping its gains.
The dollar index, which measures the U.S. currency against a basket of peers, rose 0.6% to 89.886.
On Wednesday, the rupee had settled at 73.11 against the American currency.
Democrats won one U.S. Senate race in Georgia and led in another on Wednesday, moving closer to a sweep in a deep South state that would give them control of Congress and the power to advance President-elect Joe Biden's policy goals.
The local unit finally settled at 73.11, registering a rise of 6 paise over its previous close.
Sustained foreign fund inflows and weakness of the American currency in the overseas market restricted the rupee's fall, forex dealers said.
The rupee opened at 73.15 against the US dollar, down 13 paise from the previous close of 73.02.
With U.S. interest rates pinned at record lows, massive U.S. deficits and a belief that rebounding world trade will drive non-dollar currencies higher, the dollar weakened on the first day of trading in 2021 after falling nearly 7% last year.
The local unit finally settled at 73.02, registering a rise of 9 paise over its previous close. This is the rupee's highest level since September 1, 2020, when it had closed at 72.87.
In the longer term, the overvaluation of the rupee in real terms and higher inflation in India versus the US should exert weakening pressure for the rupee, it said.
The Indian rupee opened at 72.93 against the US dollar, up 19 paise from the previous close of 73.12.
In the previous week to December 18, the reserves had surged by USD 2.563 billion to a lifetime high of USD 581.131 billion.
The local unit finally settled at 73.11, registering a fall of 4 paise over its previous close.
At the interbank forex market, the domestic unit was trading in a narrow range on Friday. It opened at 73.09 against the US dollar and fell to 73.11 against the greenback, registering a fall of 4 paise over its previous close.
The prospect of a brighter 2021 has lessened the lure of the safe-haven dollar, while burnishing the attraction of assets overseas, especially in emerging markets.
In the last six trading sessions, the Indian rupee has gained 77 paise.
On Tuesday, the rupee had settled at 73.42 against the American currency.
The dollar fell 0.35% against a basket of currencies to 89.92. It is holding just above a two-and-a-half year low of 89.72 reached on Dec. 17.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.32 per cent to 90.04.
Net short non-commercial positions in futures linked to the ICE US Dollar Index have surged to the most since March 2011, according to the latest Commodity Futures Trading Commission data.
On Thursday, the rupee had settled at 73.55 against the US dollar.
Rupee has been a laggard in 2020, as the currency did not appreciate much despite record inflows.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Global reserves are assets of central banks held in different currencies and are used primarily to support their liabilities. Central banks sometimes use reserves to help support their respective currencies.
Sterling pared gains after the Brexit trade announcement, while the dollar retraced some of its losses, as investors have already priced in the deal and have taken profits.
In a year that’s upended so many norms, the dollar’s crown has slipped. The world’s reserve currency is trailing its Group-of-10 peers, but its slide is most evident in some shallower markets on the fringes of global finance.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.20 per cent to 90.23.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.29 per cent to 90.39.
The domestic unit opened at 73.95 against the US dollar and witnessed an intra-day high of 73.82 and a low of 73.95.
At 0802 GMT, the euro was down 0.31% at $1.2209 while the pound was losing 0.33% at $1.3422.