The rupee gained further ground against the US currency and finished at a new two-month high of 64.41, appreciating by 9 paise after sustained dollar unwinding by exporters and corporates.
The rupee gained further ground against the US currency and finished at a new two-month high of 64.41, appreciating by 9 paise after sustained dollar unwinding by exporters and corporates. Expectations of robust capital inflows against the backdrop of Moody’s recent sovereign rating upgrade for India largely kept forex market sentiment buoyant despite impending Fed rate hike concerns and surging crude prices. Moreover, economic growth in the second quarter is widely expected to rebound after Q1’s dismal 5.7 per cent — the lowest in the past 13 quarters, keeping bullish tone intact. The GDP growth numbers for the September quarter are due to be released on Thursday. In early trade, the home currency opened lower at 64.53 against overnight close of 64.50 at the Interbank Foreign Exchange (forex) market on bouts of demand for the greenback. It mostly traded in a tight range between 64.6000 and 64.35 most part of the day with marked volatility before concluding at 64.41, showing a gain of 9 paise, or 0.14 per cent.
The Indian unit has rebounded yesterday by a smart 20 paise. The RBI, meanwhile, fixed the reference rate for the dollar at 64.4206 and for the euro at 76.6992. Country’s foreign exchange reserves rose by USD 240.4 million to USD 399.533 billion in the week to November 17, the weekly data from the Reserve Rank showed. Besides, the dollar’s weakness overseas also supported the rupee. The US dollar continued to languish at 8-week lows against many of its peers amid growing worries over possible delays to the US Tax Reform Plan. Global crude prices drifted slightly on uncertainty over the outcome of a key OPEC meeting in Vienna this week to decide on production policy for the next year. Brent crude, the international benchmark, is trading lower at USD 62.85 a barrel in early Asian trade.
Meanwhile, domestic markets succumbed to modest losses as cautious investors booked profits in select heavyweights such as Reliance and Infosys Ltd, breaking an uninterrupted eight-session winning streak. But, most Asian bourses finished higher despite news stories suggesting that North Korea could be preparing another missile test. The BSE Sensex tumbled over 105 points to end at 33,618.59, while Nifty shed 29 points at 10,370.25. The dollar index, which measures the greenback’s value against a basket of six major currencies, was up at 92.98 in early trade. In cross-currency trades, the rupee strengthened against the Pound sterling to finish at 85.65 from 86.09 per pound and also firmed up against the Japanese yen to settle at 57.87 per 100 yens from 58.00 yesterday. The local unit also bounced back sharply against the euro to close at 76.57 as compared to 77.01 earlier.
Elsewhere, the common currency euro consolidated at a new 10-week high against the US dollar as easing of political uncertainty in Germany and positive economic data from Eurozone supported the common currency. Pound sterling, however, is trading little changed after the Bank of England said all seven largest banks in the UK passed the stress testing. In forward market today, premium for dollar remained weak owing to sustained receiving from exporters. The benchmark six-month premium payable in April eased to 113-115 paise from 114-116 paise and the far forward October 2018 contract also moved down to 254-256 paise from 256-258 paise on Monday.