Indian rupee continued its upward movement and climbed to to over 4-month high on Wednesday and closed 15 paise up at 66.37 as banks and exporters took to selling of American currency. The local currency had closed at 66.52 level on Tuesday against US dollar. Domestic equity firm opening on Tuesday following global cues also supported the rupee. Sensex jumped 57.65 points at 29035.67, while Nifty 50 index surged 25.70 points up at 8,968.70 in the opening trade. However, markets soon pared their gains and closed lower. Sensex ended 51.66 points down at 28,926.36, while NSE Nifty declined 25.05 points to close at 8,917.95.
Dollar weakness against other overseas currencies also contributed to rupee’s rally. The American currency dropped after the economic data released showed that the chances of US Federal Reserve going for a rate hike is dim.
The currency touched a high and low of 66.39 and 66.32 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.36 and for Euro stood at 74.69 on September 7, 2016. While the RBI’s reference rate for the Yen stood at 65.46, the reference rate for the Great Britain Pound (GBP) stood at 89.03.
On Wednesday’s rupee movement, Anindya Banerjee, currency analyst, Kotak Securities said,”Indian Rupee inched closer to our expected level of 66:20, touching 66:32 levels on spot, as weak ISM services data triggered broad based selling in US Dollar. Central bank intervention may have prevented a deeper cut in the pair. Near term bullish sentiments to prevail for INR. Key levels to watch will be 66:00/66:10, if that fails, we can see more hedge based selling from exporters. Resistance is between 66:70/90 levels on spot.”