Rupee ended higher against the dollar on Wednesday on more than 1% rise in local share indices and the recovery in euro spurred banks? dollar sales, dealers said.
Rupee ended at Rs 46.9600 per dollar compared with 47.1500 per dollar. Intraday, rupee had slid to a low of 47.2700 per dollar level.
?Sentiment improved after local shares rose on Wednesaday. Due to the uncertainty in Europe, trade in rupee is likely to be volatile in the coming sessions,” said Vikas Babu, senior dealer with Andhra Bank.
The euro see-sawed in the $1.2183-$1.2273 band on Wednesday, making rupee volatile. ?Nowadays euro?s movement is key to the rupee?s direction. The movement in euro was choppy on Wednesday, so there was no clear direction to rupee’s movement,? said a dealer with a European bank.
The 7.80%, 2020 gilt settled at Rs 102.06, or 7.5004%, yield compared with Rs 101.98, or 7.5123%. yield Tuesday.
?Expectations that there will be no rate hikes soon have firmed up in the last couple of days due to comments by officials. So there is a positive undercurrent in the market,” said a primary dealer.
Dollar sales from exporters also augured well for the Indian unit on Wednesday, dealers said. ?Rupee levels below 47 (per dollar) is attractive for exporters to sell dollars. Today, also some of them were on the offer side,” said a dealer with a UK bank. A UK bank and two state-owned banks were among the major sellers of the greenback around the 47.10-47.15 per dollar level, dealers said.
Earlier on Wednesday, rupee plunged due to decline in euro below the $1.2200 mark and also due to dollar demand from importers, dealers said.
?As euro fell in the first half of trade, rupee fell to 47.2700 level. The rates in NDF were up (and) that also weighed on rupee,” said a dealer.