Rupee Hits 1-Week High Of 67.08, Gains 9 Paise

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Mumbai: Maintaining its upbeat momentum, the rupee on Friday firmed up by another 9 paise to end at a fresh one-week high of 67.08 against the US dollar amid sustained selling of the American currency by banks and exporters.

Robust capital inflows along with a smart rebound in domestic equities and unwinding of some dollar positions by speculators further supported the sentiment.

The domestic unit gained 9 paise, or 0.13 per cent, at the close.

The rupee resumed almost flat with a negative bias at 67.18 from Thursday’s closing level of 67.17 at the Interbank Foreign Exchange (Forex) market and weakened further to hit an intra-day low of 67.21 on initial dollar demand from importers and corporates.

However, the local currency swung completely in the opposite direction in mid-afternoon trade on the back of adequate dollar supply and accelerated gains to end firmly higher at 67.08, showing a smart rise of 9 paise, or 0.13 per cent.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.23 per cent at 97.16 in early trade.

The RBI fixed the reference rate for the dollar at 67.1355 and euro at 74.0303.

In cross-currency trades, the rupee staged a rebound against the pound sterling to close at 87.90 as against 88.51 yesterday and edged higher against the euro to settle at 73.91 compared to 73.98 previously.

But, the rupee held virtually steady against the Japanese yen at 63.22 per 100 yens.

Foreign institutional investors bought shares worth Rs 420.22 crore on Thursday as their buying spree continued for the ninth straight session.

In the forward market, premium for dollar remained sluggish owing to sustained receivings from exporters.

The benchmark six-month premium for December moved down to 174-176 paise from 175-177 paise and forward June 2017 contract also dropped to 371-373 paise from 374-376 paise earlier.

Meanwhile, stocks rebounded smartly after a brief overnight sell-off with the flagship Sensex surging by 92.72 points to close at 27,803.24, while broader Nifty jumped 31.10 points at 8,541.20.

In worldwide trade, the dollar traded marginally weak in the Asian session following reports that the Bank of Japan governor has ruled out helicopter money to ease Japan’s economic woes despite expectations that Federal Reserve might rais interest rates this year against the backdrop of improving US economy.

The European Central Bank (ECB) late on Thursday decided to maintain its current interest rate level after the Eurozone was largely unaffected by the market shock emanating from the UK referendum.

Meanwhile, the flash PMIs for manufacturing and services out today suggest the UK economy has been hit hard by uncertainty following the EU referendum vote.

Oil prices traded marginally weak as investors reassessed US data on oil stocks and excesses in oil products in Europe and Asia and expectations that Iraq’s oil exports are set to rise in July.