The rupee gave up most of the day's gains after rising by as much as 21 paise against the US dollar on Thursday. The rupee opened higher at 69.47 against the greenback, against its previous close of 69.68, but retreated to 69.67 mark in afternoon trade. Strength in the domestic stock markets along with a steady dollar overseas helped the rupee rise in early trade, after the Federal Reserve said it was ready to battle growing global and domestic economic risks with interest rate cuts beginning as early as next month.
The benchmark 10-year bond yield declined by 9 basis points to touch 6.75 per cent during Thursday's session - its lowest level since October 17, 2017.
The US central bank left key interest rates unchanged in the 2.25-2.5 per cent range.
The dollar index against a basket of six major currencies was little changed at 97.188 after losing more than 0.5 per cent overnight.
"Asian and emerging market currencies are trading stronger against the US dollar. Overall risk sentiment has improved," said forex advisory firm IFA Global.
Foreign funds pulled out Rs 97.05 crore from the capital markets on a net basis on Wednesday, according to provisional data from the National Stock Exchange (NSE).
Domestic stock markets reversed early losses on the back of gains in auto, pharma and state-run banking stocks. The S&P BSE Sensex index rose as much as 372.85 points from the day's lowest level to 39,306.63, and the NSE Nifty benchmark moved to 11,743.45, up 108.4 points from its intraday low of 11,635.05. Losses in IT stocks however kept the upside in check.
At 1:09 pm, the rupee was seen trading at 69.56 against the dollar.
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