Indian rupee appreciated by over 0.6% vs US dollar

Written by PTI | Updated: Aug 16 2014, 22:00pm hrs
The Indian rupee appreciated for the second week in a row and closed up by 39 paise to end at two-week high of 60.76 against the US dollar during the shortened week under review following sustained dollar selling by exporters and some banks amid bullish local equities.

The forex market was closed on Friday, August 15, on account of 'Independence Day'.

At the Interbank Foreign Exchange (Forex) market, the local unit commenced the week better at 61.09 a dollar from last weekend's close of 61.15 and dropped to a low of 61.30 on Wednesday on fresh dollar demand from importers, amid uptick in retail inflation and slowing industrial production growth.

Later, it bounced back to settle the week at its highest level of 60.76, showing a rise of 39 paise, or 0.64 per cent.

On Thursday, it gained 45 paise -- its best single day gain in three months -- amid fall in wholesale inflation to five-month low in July.

The benchmark S&P BSE Sensex snapped its two-week losses and closed the week sharply higher by 774.09 points, or 3.06 per cent, while FIIs bought shares worth Rs 1,595.72 crore during last week, including provisional data of August 13 and 14.

Meanwhile, the country's industrial production (IIP) slowed to 3.4 per cent in June as against 5 per cent in May, while retail inflation, as measured by consumer price index (CPI) rose to 7.96 per cent in July from 7.46 per cent in June, as per government data announced on Tuesday.

Meanwhile, inflation as measured by Wholesale Price Index (WPI) dropped to five-month low of 5.19 per cent in July, as per government announcement on Thursday.

Pramit Brahmbhatt, Veracity Group CEO said, "Rupee appreciated for the week after falling for two consecutive weeks taking cues from strong local equities. Indices gained almost three per cent during the week.

"To end the week, Rupee appreciated by over 0.6 per cent. The immediate support for the USD/INR pair is at 60.50, once breached comfortably we can see the pair trading at 60.00 levels. The trading range for the Spot USD/INR pair for Monday is expected to be within 60.40 to 61.40."

The benchmark six-month forward dollar premium payable in January dropped sharply at 227-231 paise from 243-245 paise last week and far-forward contracts maturing in July 2015 also tumbled to 473-475 paise from 488-490 paise.

The RBI fixed the reference rate for the USD at 61.0583 and the euro at 81.5552 from previous weekend's close of 61.5575 and 82.4125.

The rupee shot up further against the pound sterling to 101.34 from 102.79 preceding weekend and also remained firm to 81.27 per euro from 81.88.

It, however, recovered smartly to 59.34 per 100 Japanese yen from 59.97 last weekend.