Snapping its 2-day losing streak, the rupee recovered by 9 paise at 64.04 against the US dollar on fresh selling of the greenback by banks and exporters on hopes of fresh foreign capital inflows into equity markets.
The rupee opened higher at 64.01 as against last weekend’s level of 64.13 at the Interbank Foreign Exchange (Forex) market and hovered in a range of 63.92 and 64.07 before concluding at 64.04, showing a gain of 9 paise, or 0.14 per cent.
The local currency had lost 22 paise, or 0.34 per cent, in the previous two days.
Meanwhile, the benchmark BSE Sensex continued to rule firm for the fourth consecutive day, surging by 73 points to close at 28,187.06, on persistent buying from investors on hopes of rate cut from Reserve Bank of India (RBI) tomorrow.
The dollar index was up by 0.24 per cent against a basket of six currencies in late afternoon trade.
In the overseas market, the dollar finished with monthly gains against most of its rivals. Its strong performance in July followed a weak showing in June, when the dollar finished the month lower against other major currencies.
It finished the month up 1.4 per cent against the euro, its best monthly performance since May.
Oil prices fell in Asia today on persistent concerns about the global supply glut after the OPEC cartel’s indication that it will not budge from its current lofty output levels, analysts said.
Veracity Group CEO Pramit Brahmbhatt said, “Today, the rupee appreciated on strong cues from local equities which closed on a positive note.
“Now, the investors are waiting for the RBI credit policy which is to be announced tomorrow. It is expected that the RBI will keep the key repo rate untouched at 7.25 per cent.”
The trading range for the spot USD/INR pair is expected to be within 63.70 to 64.40.
In the forward market, the premium for the dollar eased further on consistent receivings from exporters.
The benchmark six-month premium payable in January moved down further to 216.50-218.50 paise from 217-219 on last Friday and far-forward contracts maturing in July 2016 also eased to 440-442 paise from 441-443 paise.
The RBI fixed the reference rate for the dollar at 63.9623 and for the euro at 70.1602.
The rupee firmed up further against the pound sterling to close at 99.73 from 99.86 on last Friday and recovered against the euro to 70.18 from 70.33.
It also moved up against the Japanese currency to 51.55 per 100 yen from 51.58 previously.