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Rupee at 2-week high; gains 18 paise vs dollar

Last Updated: Monday, July 2, 2012 - 19:24

Mumbai: The rupee Monday extended its gains for the third straight session and strengthened by 18 paise at a fresh 2-week high of 55.43 against the dollar following sustained selling of the American currency by exporters and some banks amid continued capital inflows.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed higher at 55.50 a dollar from last weekend's close of 55.61. It touched a low of 55.92 in the afternoon deals on weakness in stock market and a firm trend in dollar overseas.

However, the rupee bounced back later to settle at the day's high of 55.43 on dollar selling by exporters and some banks at the rupee's lower levels.

The rupee also received support from robust capital inflows. FIIs Monday pumped in Rs 591 crore in stocks, provisional data from stock exchanges showed.

There were a few reports of RBI intervening to help the rupee after it touched the intra-day low but there was no major effort in my view, a treasury official at public-sector bank said.

"The rupee started the day on a firm note but continued to weaken till the second half after which it pared losses and made its way below the day's low but remained choppy thereafter," Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said.

A rise in the dollar index limited the rupee's surge, a forex trader said. The dollar index was trading up by nearly 0.28 percent against a basket of currencies ahead of the European Central Bank (ECB) policy decision later this week.

Meanwhile, the Indian stock market benchmark Sensex moved in a narrow range today and closed down by 31 points or 0.18 percent.

Foreign Institutional Investors have injected over Rs 2,896 crore in Indian stocks, including provisional data from stock exchanges of June 29, which had supported the rupee's recent rise.

Abhishek Goenka, Founder and CEO, India Forex Advisors said," After trading in a tight range, the rupee closed higher today. In the last 2-3 sessions, we had seen rupee appreciating against the dollar and hitting the levels of 55.50. If USD/rupee does not move above 56.00 levels on Tuesday, we might see the levels of 55.00-54.50 in the near term."

The premium for the forward dollar recovered on fresh paying pressure from banks and exporters.

The benchmark six-month forward dollar premium payable in December finished up at 179-181 paise from last Friday's close of 175-177 paise.

The premium for far-forward contracts maturing in June also recouped to 325-327 paise from 318-1/2-320-1/2 paise.

The RBI fixed the reference rate for the US dollar at 55.8300 and for euro at 70.4295.

The rupee fell back slightly against the pound sterling to 86.86 from last weekend's close of 86.78 while edged up further to 69.90 per euro from 69.93 previously.

The rupee also remained firm against the Japanese yen to 69.53 per 100 yen from last close of 69.95.


First Published: Monday, July 2, 2012 - 11:49
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