The rupee ended nearly unchanged at 74.75 against the US Dollar on Thursday. After starting the day stronger at 74.64 against the greenback compared to its previous close of 74.76, the rupee moved in a range of 74.60-74.87 during the four-hour session. Although gains in domestic equity markets and weakness in the dollar overseas offered support, the rupee failed to sustain its intraday gains due to rising tensions between the US and China, according to analysts.
"Escalating tensions between the US and China could keep appreciation bias limited," Reliance Securities said in a note, adding that weaker Asian currencies could also weigh on the rupee.
The US has ordered China to close its consulate in Houston. Meanwhile, Beijing has denounced the order on Wednesday as "outrageous" and said it would draw a firm response if not reversed.
The dollar index - which measures the greenback's against six currencies - fell as much as 0.22 per cent on Thursday.
Crude oil prices rose on the back of a weaker dollar, but gains were capped by concerns about rising US inventories and a persistent surge in new coronavirus cases.
Brent crude futures - the global benchmark for crude oil - were last seen trading 0.80 per cent higher at $44.64 per barrel.
Meanwhile, domestic stock markets registered mild gains on Thursday as investors were encouraged by overnight gains on Wall Street, even as domestic coronavirus cases crossed 1.2 million. At 2:26 pm, the Sensex traded 0.55 per cent higher at 38,078.04, while the Nifty was up 0.54 per cent at 11,192.25.
Foreign portfolio investors were net buyers of Indian equities worth Rs 1,665.57 crore on Wednesday, exchange data showed.
At the current level, the rupee has recovered 2.81 per cent from an all-time low of 76.91 against the dollar registered in April, but is still down 4.75 per cent for the year.
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