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Rupee hits 3-1/2 mth high, up 11 paise to 66.71

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Mumbai | Published: February 27, 2017 8:04:12 PM

The rupee strengthened further to end at a fresh 3-1/2 month high of 66.71, appreciating by 11 paise on the back of sustained selling of the American dollar by exporters and banks.

The rupee strengthened further to end at a fresh 3-1/2 month high of 66.71, appreciating by 11 paise on the back of sustained selling of the American dollar by exporters and banks. (Reuters)

The rupee strengthened further to end at a fresh 3-1/2 month high of 66.71, appreciating by 11 paise on the back of sustained selling of the American dollar by exporters and banks. A large uptick in foreign capital inflows along with unwinding of long-dollar positions by speculative traders predominantly supported the highly bullish upmove.
This is the highest closing since November 10, 2016. Though, forex market sentiment largely focused on an upcoming speech from US President Donald Trump on Tuesday for further details on his promises on reforms, deregulation and infrastructure spending.

However, domestic equities couldn’t find the magic as market players looked cautiously. The home unit resumed firmly higher at 66.75 from last Thursday’s closing value of 66.82 at the Interbank Foreign Exchange market and gained further ground to hit an intra-day high of 66.6450 before ending at 66.71, showing a rise of 11 paise, or 0.16 per cent. Meanwhile, the US dollar traded little changed against its major counterparts. The US dollar index was trading higher at 101.70 in the late afternoon session.

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The RBI fixed the reference rate for the dollar at 66.7249 and for the euro at 70.5149. In cross-currency trade, the rupee also rose sharply against the British pound to finish at 82.78 from 83.26 earlier. But, the local currency weakened further against the euro to close at 70.56 as compared to 70.48 and also dropped against the Japanese Yen to settle at 59.42 per 100 yens from 58.97 previously. Meanwhile, country’s foreign exchange reserves dipped by USD 56.8 million to USD 362.73 billion in the week to February 17, on account of decline in foreign currency assets (FCAs).

Domestic bourses succumbed to fresh bout of selling pressure after rallying for six straight sessions as investors booked profits in banking, telecom and auto shares even as market heavyweight Reliance Industries maintined its surge. The benchmark Sensex fell back over 80 points to end at 28,812.88, while broader Nifty settled 42.80 points lower at 8,896.70. In the forward market, premium for dollar moved down owing to renewed receivings from exporters.

The benchmark six-month premium for July declined to 136-138 paise from 139.50-140.25 paise and the far-forward January 2018 contract also edged down to 292-294 paise from 295.25-296 paise last Thursday.
On global commodity front, crude prices staged a sharp rebound as traders bought the dip after last week’s sharp plunge, but rising US production limited gains.

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