Rupee appreciated 17 paise to close at 83.33 (provisional) against the US dollar on Friday, on positive domestic markets and expectations of some fresh foreign inflows.
Reports of selling of US dollars by the Reserve Bank of India (RBI) also supported the rupee, forex traders said.
At the interbank foreign exchange market, the local unit opened at 83.50 and touched an intraday high of 83.32 and a low of 83.50.
The domestic unit finally settled at 83.33 (provisional), a rise of 17 paise from its previous close.
On Thursday, the rupee had settled at 83.50 against the US dollar.
"We expect the rupee to trade with a slight negative bias on strengthening of the US dollar amid hawkish Fed speak and weak Asian and European markets. However, a positive tone in domestic markets may support the rupee at lower levels.
"Any fresh FII inflows and/or RBI intervention may support rupee at lower levels. USD-INR spot price is expected to trade in a range of Rs 83.20 to Rs 83.70," said Anuj Choudhary -- Research Analyst at Sharekhan by BNP Paribas.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.73, higher by 0.26 per cent.
Brent crude futures, the global oil benchmark, rose 0.13 per cent to USD 83.38 per barrel.
On the domestic equity market, the 30-share BSE Sensex advanced 253.31 points, or 0.34 per cent, to close at 73,917.03 points. The broader NSE Nifty settled 62.25 points, or 0.28 per cent, higher at 22,466.10 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 776.49 crore, according to exchange data.
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