The rupee appreciated to briefly trade below the 75 mark against the dollar on Friday, amid a mixed trend in Asian currencies. It moved in a range of 28 paise against the greenback, between 74.96 and 75.24, during the four-hour session before shutting shop with a gain of 17 paise - or 0.22 per cent - at 75.02. The rupee had reversed direction soon after starting the day weaker at 75.23 compared to its previous close of 75.19. Strength in domestic equity markets and weakness in the dollar supported the rupee, according to analysts.
Domestic stock markets climbed up for a third consecutive session, with benchmark indices Sensex and Nifty registering their fifth straight week of gains, as hopes of strong corporate earnings outweighed concerns over surging COVID-19 cases in the country.
The S&P BSE Sensex index rose 1.5 per cent to 37,020.14 - its highest closing level since March 6, and the broader NSE Nifty 50 benchmark settled up 1.51 per cent at 10,901.70.
The dollar index - which gauges the greenback against six peers - was last seen trading 0.27 per cent lower, having earlier fallen as much as 0.33 per cent on Friday.
International crude oil rates moved lower on Friday amid growing uncertainty about the recovery in fuel demand as coronavirus cases surged in several countries, while major crude producers prepared to lift output.
Brent crude futures - the global benchmark for crude oil - were last down 0.74 per cent at $43.05 per barrel.
The Japanese yen rose 0.06 per cent against the American currency, the Singaporean dollar 0.18 per cent and the Korean won 0.03 per cent, whereas the Chinese yuan, the Thai baht, the Indonesian rupiah and the Taiwanese dollar were down 0.12 per cent, 0.01 per cent, 0.53 per cent and 0.09 per cent respectively.
Analysts expect the rupee to appreciate towards the 74 mark in the near term.
"The bias for the rupee is skewed towards appreciation, at least in the near term, on the back of persistent inflows and hopes of a potential coronavirus vaccine... The dollar index has weakened and equity rally suggests room for more inflows," said Sugandha Sachdeva, VP-metals, energy and currency research at Religare Broking.
For the week, the rupee strengthened by 18 paise - or 0.24 per cent - against the US currency.
"For the time being, 75.50 should act as a strong cushion level for the domestic currency. A possible standoff between the US and China, or aggressive Reserve Bank of India intervention, however, can lead to a break below these levels," Ms Sachdeva added.
At the current level, the rupee has recovered 2.46 per cent from a record low of 76.91 logged in April, but still it is down 5.13 per cent against the American currency so far this year.