Mumbai, Jan 20 (PTI) The rupee appreciated by 19 paise to close at 81.17 against the US dollar on Friday on broad dollar weakness.

However, weak domestic equities and a surge in crude oil prices capped the gains for the local currency, forex traders said.

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At the interbank foreign exchange market, the local unit opened strong at 81.24, and settled for the day at 81.17, registering a rise of 19 paise over its previous close.

During the trading session, the local unit witnessed an intra-day high of 81.09 and a low of 81.28 against the American currency.

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On Thursday, the rupee closed at 81.36 against the US dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.21 per cent to 102.26.

Global oil benchmark Brent crude futures rose 0.48 per cent to USD 86.57 per barrel.

According to Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas, the Indian rupee appreciated on Friday on soft US dollar and FII inflows on Thursday.

"Dollar declined on increasing odds of a 25-bps rate hike by FOMC following disappointing economic data coming out from the US," Choudhary said.

The US Federal Reserve Vice Chair Lael Brainard hinted that the US Fed may hike rates at a slower pace by 25 bps in the next Federal Open Market Committee (FOMC) meeting in February and is expected to hold higher rates for longer to tame inflation.

"We expect the rupee to trade with a positive bias on a weak tone in the greenback. However, concerns over global economic growth and a surge in crude oil prices may cap a sharp upside.

"Traders may focus on existing home sales data and comments from FOMC members. USD/INR spot price is expected to trade in a range of Rs 80.50 to Rs 81.80," Choudhary said.

According to Dilip Parmar, Analyst, HDFC Securities, said that the Indian rupee appreciated for the fifth week in a row as the greenback weakened against the major trading currencies.

The medium-term trend for USDINR remains bearish but looking at the risk-assets performance and foreign fund outflows ahead of the budget could limit the downside.

In the coming week, the traders will eye on Adani FPO and bond inflows for directional trends. Technically, spot USDINR has support between 81 to 80.50 and resistance at 81.91.

Forex market volatility has waned amid fewer market-moving data this week and expects thin volume and low volatility next week following the China Lunar Year holiday.

On the domestic equity market front, the 30-share BSE Sensex declined 236.66 points or 0.39 per cent to end at 60,621.77, while the broader NSE Nifty fell 80.20 points or 0.44 per cent to 18,027.65.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday as they sold shares worth Rs 2,002.25 crore, according to exchange data.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)