Indian rupee ended with gains of 14 paise at 66.82 against dollar on Friday as selling of American currency rose among banks and exporters. Domestic equity markets closed higher on Friday following selective buying in blue chip companies amid positive global cues. Sensex gained 108.63 points to end at 28,532.11, while NSE Nifty closed 35 points up at 8,809.65. Indian rupee had closed at 66.96 level against US dollar on Thursday.
According to market experts, weakness in dollar against other currencies ahead of a US jobs report supported the the local currency.
“Rupee continues to find favour as favourable Trinity is doing the magic. 1) Bank of Japan’s expected monetary easing 2) low probability of a Fed hike in September 3) Continuous domestic policy action. The question remains, in absence of major risk aversion episode in global markets, how long can RBI defend the dollar? Near term range has now shifted lower, towards 66:50-67:10 levels, ” Anindya Banerjee, currency analyst, Kotak Securities said.
The local currency hovered in the range of 66.8613 and 66.8112.
US dollar dropped after payrolls data, dollar index fell 0.36 per cent to 95.296. “Federal Reserve officials had made it very clear that the decision on a rate rise in September would hinge in large part on the overall jobs report. If non-farm payrolls (NFP) exceed 200K and the unemployment rate holds steady or better yet improves, then expectations for a rate hike this month will spike, sparking a broad based dollar rally that will take USD/JPY to fresh 1 month highs. However, if NFP disappoints we could see a steep correction in the dollar particularly after the strong gains that it has seen this month,” according to IFA Global.
The RBI reference rate for US dollar stood at 66.84 on Friday against 66.95 on Thursday. The local currency’s movement will now eye new RBI governor Urijit Patel who will replace the current governor Raghuram Rajan.