Indian rupee ended marginally higher at 73.88 per dollar, amid buying seen in the domestic equity market.
It opened higher at 73.83 per dollar against previous close of 73.91 and remained in the range of 73.74-73.89.
At close, the Sensex was up 431.64 points or 0.98% at 44,259.74, and the Nifty was up 128.60 points or 1.00% at 12,987.
"Rupee left alone slowly moving up towards 73.60 levels as RBI slows down the appreciation in view of big flows and risk on sentiment and also as the prices of commodities move up particularly that of oil. RBI to ensure lower levels of inflation may allow a slow appreciation till flows hit the market. Range 73.65/95," said Anil Kumar Bhansali, Head Treasury, Finrex Treasury Advisors.
U.S. oil rose for a fifth day on Thursday as a surprise drop in crude inventories extended a rally driven by hopes that vaccines would end the coronavirus pandemic and revive fuel demand.
The dollar was on the defensive on Thursday as downbeat U.S. economic data and optimism about coronavirus vaccines prompted investors to seek out riskier assets tied to global commodities and emerging markets.
Positive inflows by FIIs and weakness in the Dollar index helped the rupee to appreciate and move towards the levels of 74. We feel the ongoing trend of the rupee is likely to continue, said ICICIdirect.The dollar-rupee December contract on the NSE was at 74.16 in the last session. The open interest rose 25.2% for the December series contract, it added.