Reversing its two-session slide, the rupee rebounded by 15 paise today to end at a fresh one-week high of 68.79 against the US dollar on bouts of greenback selling by exporters and corporates.
Reversing its two-session slide, the rupee rebounded by 15 paise today to end at a fresh one-week high of 68.79 against the US dollar on bouts of greenback selling by exporters and corporates. The forex market witnessed a highly volatile session, with the home currency falling initially before staging a comeback. The upbeat trend was supported by unwinding of long dollar positions by speculators and local banks in view of subdued overseas cues, even as Dalal Street’s record-breaking run continued for the third straight day. The Indian unit also recovered against the British pound, euro and Japanese yen.
Most Asian currencies were treading water. Earlier, the rupee opened weak at 68.96 at the Interbank Foreign Exchange (forex) market against 68.94 previously. It lost ground to hit a session low of 68.99 on intense dollar pressure, before reversing sharply as banks stepped up greenback sales for exporters and custodian clients amid a weak US currency.
After scaling an intra-day high 68.70, the local unit finally settled at 68.79, showing a sharp rise of 15 paise, or 0.22 per cent. It had lost 10 paise in last two days. Meanwhile, the greenback slipped ahead of a meeting between US President Donald Trump and European Commission chief Jean-Claude Junker in Washington, against the backdrop of a deepening trade dispute.
On the energy front, crude oil extended gains after US crude inventories fell more than expected, easing worries about oversupply. In the meantime, China announced a package of policies to spur domestic growth in the face of rising trade frictions with the US. Meanwhile, the Financial Benchmarks India Private Limited (FBIL) fixed the reference rate for the dollar at 68.8028 and for the euro at 80.4497.
The bond market, however fell back and the 10-year benchmark yield ended higher at 7.79 per cent. Against a basket of other currencies, the dollar index was down at 94.27. In cross currency trade, the rupee also recuperated against the British pound, euro and Japanese yen to end at 90.51, 80.44 and 61.94 per 100 yens, respectively.
Elsewhere, the euro remained flat against the US dollar ahead of Trump’s scheduled meet with Juncker even as the ECB convenes on Thursday to make its rate decision. The British pound retreated sharply after hitting a fresh one-week high on bouts of risk-aversion that gripped the European markets. In forward market today, premium for dollar showed a mixed trend owing to lack of market moving factors.
The benchmark six-month forward premium payable in November softened to 102-104 paise from 103-105 paise, while the far-forward May 2019 contract was steady at 253-255 paise.