Rising for the second day, the rupee today strenghtened by 12 paise to end at a three-week high of 62.1 against the dollar on capital inflows linked to rise in stocks and a weak American currency ahead of US retail sales.
The rupee traded in a tight range in otherwise listless trade as participants eyed domestic industrial production data and retail inflation figure, said forex traders.
After forex markets closed, the government said retail inflation dropped to 8.79 per cent in January versus 9.87 per cent in December. IIP contracted 0.6 per cent in December.
The rupee commenced higher at 62.08 a dollar from last close of 62.22 but immediately touched a low of 62.1750. Later, it recovered and rose to a high of 62.04. It finally concluded at 62.10, showing a rise of 12 paise or 0.19 per cent. Yesterday, it had gained 21 paise or 0.34 per cent.
Rupee's closing value of 62.10 against dollar is the highest since 61.93 on January 23, 2014.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "Yesterday, dollar declined against its rivals after that country’s major trade partner China reported stronger than expected exports growth in January. Taking cues from this, the rupee appreciated. The trading range for the spot rupee is expected to be within 61.80 to 63.20."
The dollar weakened against all but two of its 16 major peers on fears thaty US retail sales were sluggish last month.
The benchmark S&P BSE Sensex today improved further by 85.12 points or 0.42 per cent. As per stock exchange data, FIIs pumped in Rs 200 crore in equities today.
Forward dollar premiums softened further on sustained receipts by exporters. The benchmark six-month forward dollar premium payable in July declined to 241-243 paise from 242-246 paise and far forward contracts maturing in January also eased to 482.5-484.5 paise from 484.5-486.5 paise previously.
The RBI fixed the reference rate for the dollar at 62.1250 and for the euro at 84.7215.
The rupee fell back against the pound to end at 102.76 from 102.20. It rebounded to 84.58 per euro from 85.01 previously. It,