Exhibiting strength against the beleaguered dollar for the fourth straight day, the rupee appreciated by another 6 paise to end at a fresh one-week high of 65.08 on continued selling of the greenback. The overall forex market sentiment got a much-needed leg-up after the minutes from the Federal Reserve’s last monetary policy meeting sounded dovish on rate rise outlook. Consistent selling of dollars by some foreign banks and unwinding of short-term forward contracts by exporters mainly boosted the rupee trade. A massive surge in local equities also helped the rupee rally to sustain. However, the upmove was capped due to some caution ahead of the key economic data — industrial production (IIP) for August and consumer inflation for September — to be released later in the day. At the Interbank Foreign Exchange (forex) market, the home currency opened a tad higher at 65.13 from overnight close of 65.14. It remained confined in a tight range of 65.04 and 65.15 most part of the day before ending at 65.08, showing a gain of 6 paise, or 0.09 per cent.
The Indian unit has strengthened by a whopping 30 paise with a four-day rally. The RBI, meanwhile, fixed the reference rate for the dollar at 65.1003 and for the euro at 77.2741. In the meantime, domestic equities staged a stellar rebound on the back of across-the-board buying spree as investors considered the latest set of US Federal Reserve policy minutes amid bullish global cues after a record close on Wall Street.
The benchmark Sensex shot up over 348 points to close at 32,182.22, while Nifty surged 112 points at 10,096.40. Globally, the dollar fell to two-week lows against other major currencies amid fresh uncertainty over a potential US rate hike before the end of the year and as investors eyed a batch of US economic reports due later in the day. The dollar index, which measures the greenback’s value against a basket of six major currencies, was trading higher at 92.98 in early trade. In cross-currency trades, the rupee hardened against the pound sterling to finish at 85.54 from 85.91 per pound and also advanced against the Japanese yen to settle at 57.97 per 100 yens from 58.02 earlier.
The local currency, however, drifted further against the euro to end at 77.17 from 77.03 yesterday. In forward market today, the premium for dollar remained under immense pressure owing to sustained receiving from exporters.
The benchmark six-month premium payable in March dropped to 123-125 paise from 127.50-129.50 paise and the far forward September 2018 contract also declined to 261-263 paise from 265.50-267.50 paise on Wednesday.
On the international energy front, crude prices eased marginally impacted by a surprise increase in US inventory despite efforts by OPEC to cut production, though the overall sentiment remained buoyant on the back of demand outlook.
US West Texas Intermediate (WTI) crude futures were trading at $51.08 per barrel in early Asian trade, down 22 cents, or 0.4 per cent, from their last settlement. Brent crude futures, the international benchmark for oil prices, were at $56.65, down 29 cents, or 0.5 per cent, from the previous close.