The Indian rupee bounced back against the US currency by recovering 18 paise to settle the week at 62.31...
Forex: The Indian rupee bounced back against the US currency by recovering 18 paise to settle the week at 62.31 at the Interbank Foreign Exchange (Forex) market on fresh selling of dollars by banks and exporters in view of sustained foreign capital inflows into local equity markets.
A weaker-than-expected US jobs data released last week has led to investors expecting a delay in the rate hike by the Federal Reserve, hoping foreign funds to continue invest in emerging markets, including India.
The domestic currency opened strong at 62.10 per dollar- nearly one-month intra-trade high — as against the last weekend’s level of 62.49 on early heavy offerings of dollars.
However, it failed to maintain its early gains and fell back to 62.42 on dollar demand from banks and importers before concluding the week at 62.31, still higher by 18 paise or 0.29 per cent. The domestic currency hovered in a range of 62.10 and 62.42 during the week.
Banks and exporters preferred to reduce their dollar position on expectations of more foreign capital inflows into local equities after Moody’s upgraded India’s credit rating outlook.
Foreign Portfolio Investors injected USD 200.30 million on first four day’s of the week in local stocks, as per the Sebi data.
Meanwhile, the factory output, as measured by the Index of Industrial Production (IIP) grew to a nine-month high of 5 per cent in February on improved mining and manufacturing activity coupled with larger offtake by capital goods.
It had declined by 2 per cent in February 2014 whie IIP for January has been revised upwards to 2.77 per cent from the provisional estimate of 2.6 per cent released last month. Forward dollar premium ended mixed due to uneven demand and supply transactions.
The benchmark six-month forward dollar premium payable in September fell further to 224.5-226.5 paise from the last weekend’s level of 232-234 pasie on receiving by exporters while far-forward contract maturing in March rebounded to 457.5-459.5 paise from 446-448 paise on fresh paying pressure from banks and corporates.
The RBI fixed the reference rate for the US dollar at 62.3660 and the euro at 66.4884 from last weekend’s level of 62.5908 and 67.5104, respectively.
The rupee gained further against the pound sterling to end the week at 91.09 from 92.45 last Friday and also rallied further to 66.01 per euro from 67.18 last weekend.
It also firmed up further 51.76 per 100 yen from 52.12 in preceding weekend’s level.