MUMBAI: The rupee today strengthened further against the American currency by surging 16 paise to end at 68.07 on fresh selling of dollars by banks and exporters on the back of a sharp recovery in the equity market despite higher greenback overseas.
The rupee resumed higher at 68.20 per dollar as against the last Friday’s closing of 68.23 at the Interbank Foreign Exchange ( Forex) market and dropped further to 68.01 before concluding at 68.07, showing a gain of 16 paise or 0.23 per cent.
The rupee has gained by 23 paise or 0.34 per cent in two days.
The domestic unit hovered in a range of 68.20 and 68.01 per dollar during the day.
Meanwhile, the dollar index was up 0.14 per cent against a basket of six currencies in the late afternoon Asian trade.
Overseas, the US dollar was mostly up against its major rivals in Asian trade.
Investor sentiment has turned positive after a rally in commodities and banking shares that elevated European markets and US stocks Friday. The positive mood has translated into a sharp recovery in the benchmark Nikkei Stock Average by 7.16 per cent.
The benchmark Sensex recovered by 568 points or 2.47 per cent today.
Pramit Brahmbhatt of Veracity Financial Services said, “As expected the rupee got a support of the Indian equity markets and the global rally of the equity markets. It recovered by almost 16 paise and closed on 68.07. We can expect the same rally of the equity markets to continue and that would also support the rupee. The trading range for USD/INR pair is expected to be within 67.80 to 68.15 in the coming trading session.
In forward market, premium for dollar declined further on good receivings from exporters.
The benchmark six-month premium July contract moved down to 195.5-197.5 paise from 196-198 paise on last Friday while far forward January 2017 contract also moved down to 410-411.5 paise from 410-412 paise.
The RBI fixed the reference rate for the dollar at 68.1348 and for the euro at 76.5086.
In cross-currency trades, the rupee recouped against the pound sterling to finish at 98.55 from 99.22 previously and moved up further against the euro to 76.27 from 76.97.
The domestic unit firmed up further against the yen to 59.74 per 100 yen from 60.67 previously.