Dollar is trading at 64.2550 against its opening of 64.3700. Dollar in the offshore market traded down during European trades tracking the fall in spot pair on selling by foreign and private banks amid likely overseas funds inflow into local stocks. U.S. dollar is unlikely to rebound this year, even though the Federal Reserve is expected raise interest rates at least three times. The greenback traded higher after Senate leaders announced a two-year budget agreement that pushed back concerns that a partisan stalemate could lead to a government shutdown or a debt default. US Congress's budget agreement eases some political risks which investors and analysts said may have contributed to recent dollar weakness. Asian markets advanced on Thursday, after last session's rally faltered late in the day, despite losses made in the US markets.
Rising U.S. wage inflation and expectations for an end to European Central Bank stimulus hit bond markets and nudged U.S. Treasury yields up to four-year highs last week, leading to the worst sell-off in stock markets in six years.
BSE Sensex closed higher by 330.45 points at 34,413.16, while the Nifty 50 rose 100.15 points to close at 10,576.85.
INTERNATIONAL
Asian shares flirted with six-week lows as U.S. bond yields crept up towards four-year highs as investors fretted that low borrowing costs enjoyed by companies for many years may be endangered by the threat of rising inflation.
China's trade machine kicked up a gear in January after stumbling the previous month, with exports and imports both growing much more than expected, getting the economy off to a solid start to the year.
Gold prices dropped for a third consecutive day, holding near four-week lows hit in the previous session, on a firmer greenback amid expectations of more U.S. interest rate hikes this year.
Crude oil shrugged off record imports by top buyer China in January reported on Thursday and stayed with a negative trend overnight in the US where fresh levels of shale output continues to come to the market as a counterweight to OPEC-led curbs.
South Korea's central bank said it would keep interest rates accommodative for now because inflation is tepid and consumers are saddled with record household debt.