The Indian rupee on Friday strengthened further against the US dollar to appreciate up to Rs 83.48 per dollar during the day, before settling at 83.57 per dollar—a two-month high. The local currency witnessed its highest weekly gain in the current calendar year. The domestic unit appreciated by 0.4 per cent against the dollar during the week.

The Indian currency has been on a recovery path since September 11 when it had settled at 83.99 against the American currency, a tad higher than the lowest level of 84.09 recorded on August 5.

The Indian rupee's recovery on Thursday will have to contend with a broadly higher U.S. dollar despite the Federal Reserve delivering a 50-basis-point rate cut.

The U.S. Federal Reserve’s recent 50 basis points (bps) rate cut has stirred expectations that India’s Reserve Bank (RBI) may soon follow suit. Historically, India has often mirrored U.S. monetary policy,