Mumbai: The rupee on Thursday staged a robust rebound and ended at a fresh three-week high of 64.58 a dollar, surging by a whopping 34 paise after FOMC minutes signalled shallow rate hike path.
A massive slide in US dollar overseas mainly forced banks and exporters to unwound their long dollar bets along with dovish sound of Fed meet minutes outcome, paving the way for rupee to gain strongly, according to traders.
Abundant capital inflows from foreign investors into equity and debt markets predominantly catapulted the blistering rally.
This is the highest closing for the home currency since November 3.
Globally, the dollar endured its biggest drop in months against other major currencies on Thursday after the minutes of the Fed's latest meeting showed that some policymakers remain concerned over persistently low inflation.
Brent crude, the international benchmark, is trading marginally lower at $62.75 a barrel in early Asian trade.
In the meantime, local equities extended their winning run for the sixth-straight session led by strong gains in technology companies despite profit-taking at higher levels.
Asian markets were mostly lacklustre amid massive plunge in China stocks and bonds even as the US Thanksgiving break loomed invitingly.
The Indian unit opened on a highly positive note at 64.80 against Wednesday's close of 64.92 at the Interbank Foreign Exchange (forex) market on adequate dollar supply.
Maintaining its highly bullish trend, the home unit scaled a fresh intra-day high of 64.57 in mid-afternoon deals before ending at 64.58, showing a smart rise of 34 paise, or 52 per cent.
The rupee had settled 3 paise lower on Wednesday.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.7949 and for the euro at 76.6264.