Indian rupee on Wednesday strengthened against the US dollar for the second day in a row as investors look past the Iranian missile strikes on two U.S.-Iraqi bases and also on concern over slowing gross domestic product and surging crude may push government to widen its budget deficit to support the economy.

Rupee closed at 71.71 a dollar, up 0.18% from Tuesday's close of 71.83. The Indian unit had opened at 72.02 and touched a low of 72.03.

Government estimates on Tuesday evening showed, GDP is expected to expand 5% in the fiscal year to March 2020, the slowest since 2013,which is in line with Bloomberg survey and compares with a 6.8% expansion in the previous year.

Year to date, the rupee has weakened 0.46%, while foreign investors have bought nearly $381.80 million in Indian equities and sold $844.50 million in debt.

The yield on the 10-year government bond was at 6.559% compared with its previous close of 6.554%. Benchmark index, Sensex fell 0.13% or 51.73 points to close at 40817.74 points. Year to date, the index has lost 1.06%.

Asian currencies were trading lower. South Korean won was down 0.37%, Japanese yen 0.24%, Malaysian ringgit 0.22%, Indonesian rupiah 0.16%, Philippines peso 0.13%, Thai Baht 0.06%, Singapore dollar 0.05% and Taiwan dollar 0.03%.However, China Renminbi gained 0.04%, Hong Kong dollar 0.02% and China offshore 0.01%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 97.114, down 0.11% from its previous close of 97.005.

(Bloomberg contributed this story)

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