By laksh5382 
Buoyed by a strong recovery in domestic equity markets and softening inflation data, the rupee on Friday recovered from its all-time low against the US dollar and closed 10 paise higher at 84.78 (provisional).
However, forex traders said a stronger US currency and foreign fund outflows abroad limited the positive bias in the local unit.
At the interbank forex, the rupee opened at 84.87 and touched an intra-day high of 84.77 against the greenback. The unit finally ended the session at 84.78 (provisional) against the dollar, registering a gain of 10 paise from its previous close.
On Thursday, the rupee fell 5 paise to close at an all-time low of 84.88 against the US dollar. The previous record low closing level was recorded on December 9, when the unit closed 20 paise lower at 84.86 against the dollar.
Latest official data released on Thursday showed India’s retail inflation eased to 5.48 per cent in November and fell within the Reserve Bank’s comfort zone mainly due to lower food prices, which led to the central bank’s rate- There was scope for new rate cut in the assessment panel meeting. Governor Sanjay Malhotra in February.
India’s industrial production (IIP) growth slowed to 3.5 per cent year-on-year in October 2024, mainly due to poor performance of mining, power and manufacturing.
IIP recorded a growth of 11.9 percent in October 2023.
Mirae Asset Sharekhan Research Analyst Anuj Chaudhary said the rupee has recovered from its all-time low due to decline in inflation and upbeat IIP data.
Positive domestic markets also supported the rupee, he said, adding that the US dollar gained momentum due to disappointing economic data from the UK and Germany.
“We expect the rupee to trade with a negative bias due to a stronger US dollar and higher crude oil prices. FII outflows may also weigh on the rupee. However, positive domestic equities and better-than-expected macroeconomic data will support lower levels. However, the USD-INR spot price is expected to trade between Rs 84.65 and Rs 85.05, Choudhary said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06 percent higher at 106.70.
Analysts said the dollar was strengthening after US inflation data came in as expected, raising expectations of an interest rate cut by the Federal Reserve in its upcoming policy review next week.
Global oil benchmark Brent crude rose 0.54 per cent to $73.81 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex closed at 82,133.12, up 843.16 points or 1.04 per cent. Nifty jumped 219.60 points or 0.89 percent to reach 24,768.30.
Foreign institutional investors (FIIs) were net sellers in the capital market on Thursday as they sold shares worth Rs 3,560.01 crore, according to exchange data.