Rupee appreciates 6 paise to 66.74 against US dollar

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NEW DELHI: The rupee appreciate d by 6 paise to 66.74 against the US dollar in early trade on Tuesday, tracking positive trading in most Asian currency.

The domestic currency had slipped three paise to hit a two-month closing low of 66.80 on Monday on persistent dollar demand from banks and importers.

Dollar was down against major peers on Monday after the Empire State’s business conditions index showed factory activity across New York contracted unexpectedly in May after climbing for two-consecutive months.

At home, data showed the wholesale price inflation r ising 0.3 per cent in April after falling in the past 17 months. This has reduced chances of a rate cut by the RBI in the near future.

“Overall, we hold the view that RBI will not reduce the rates further and inflation particularly CPI will increase at a much faster pace than WPI despite weak international commodity prices. Stickiness in services inflation will continue to impact the divergence in inflation at wholesale and retail level,” said Dhananjay Sinha, Head- Institutional Research, Economist & Strategist, Emkay Global Financial Services.

The dollar index, which tracks the movement of dollar against a basket of six major world currencies, stood at 94.45, down 0.12 per cent.

Most Asian currencies advanced against the greenback. The Korean won (up 0.55 per cent), the Japanese yen (up 0.38 per cent) the Malaysian ringgit (up 0.37 per cent) and the Philippine peso (up 0.28 per cent) gained the most.