Rupee surges 77 paise to close at 95.08 against US dollar as oil prices tumble

The rupee surged 77 paise to close at 95.08 (provisional) against the greenback on Friday as global oil prices fell sharply after US President Donald Trump indicated an imminent deal with Iran.

A firm trend in domestic equity markets and a weaker American currency also supported the rupee during the day, forex traders said.

Trump has said a deal to end the war with Iran is nearly complete, and is expected to be signed over the weekend in Europe, as he called off military strikes on the Islamic Republic hours after threatening to take control of its oil industry.

Following Trump's remarks, international crude oil prices fell with Brent crude -- the global oil benchmark -- trading lower by 4.25% at $86.54 per barrel in futures trade.

At the interbank foreign exchange, the rupee opened at 95.40 and traded in the range of 94.95-95.53 before settling at 95.08 (provisional), up 77 paise from its previous close.

The rupee had plunged 60 paise to settle at 95.85 against the US dollar on Thursday.

"The rupee rose as oil prices fell to $88.58 levels after three months. The rupee has hovered between 95 and 95.80 in the past few days, moving with the prices of oil," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

"For Monday, we expect the rupee to remain in the range of 94.75 to 95.75. The one-month premiums were slightly higher at 2.95% while the one-year premiums were at 2.85%," he said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.65, down 0.20 per cent.

Foreign institutional investors offloaded equities worth ₹1,987.09 crore on a net basis on Thursday, according to exchange data.

Meanwhile, the BSE Sensex jumped 1,695.40 points, or 2.30%, to close at 75,527.95, while the NSE Nifty 50 advanced 461.30 points, or 1.99%, to settle at 23,622.90. The Nifty reclaimed and sustained above the 23,500 level after trading below the mark for nearly a week.

The rally was broad-based, with banking, financial, auto, realty and consumption-oriented stocks leading the gains. Market volatility also eased, with India VIX, the market's fear gauge, falling 5.16% to 14.81.