Mumbai: The rupee on Tuesday soared by a whopping 30 paise to end near four-month high of 66.52 on sliding dollar value after weaker-than-expected US jobs data eased fears of an imminent rate hike by the Federal Reserve.
This is the highest closing level since May 11, 2016 when the rupee had finished at 66.56.
A stellar rally in domestic equities alongside the dollar's weakness against other Asian currencies amid steady steam of foreign fund inflows predominantly supported the domestic unit, a forex dealer said.
Selling of dollars by some foreign banks and exporters also boosted rupee sentiment.
The US dollar lost ground for the second straight session against its leading counterparts after weekend data showed the US economy added fewer jobs than expected in August, easing chances of a Fed rate hike in September.
The rupee today opened on a strong note at 66.53 tracking positive sentiment as Urjit Patel started his innings as the 24th RBI Governor.
The rupee today played catch up after an extended weekend as compared to its last Friday's value of 66.82 at the Interbank Foreign Exchange (forex) market and strengthened further to hit a fresh intra-day high of 66.47 on heavy dollar unwinding.
It mostly traded in a tight range throughout the day before ending at 66.52, showing a solid rise of 30 paise, or 0.45 percent
The home currency has been rallying for the fifth consecutive day.
The US dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was down 0.10 per cent at 95.64 in early trade.
The forex market was shut yesterday on account of 'Ganesh Chaturthi'.
The RBI fixed the reference rate for the dollar at 66.5469 and euro at 74.1665.
In cross-currency trades, the rupee retreated against the pound sterling and closed at 88.85 from 88.56, but bounced back against the euro to end at 74.29 as compared to 74.77 earlier.
It also settled firmly higher against the Japanese yen at 64.36 from 64.59 per 100 yens previously.
Meanwhile, domestic equity markets continued their stellar rally for the second straight session against the backdrop of fading Fed rate hike fears with the key benchmark indices climbing to multi-month highs.
The flagship sensex shot up by a whopping 445.91 points to end at 28,978.02, while the broader Nifty surged 133.35 points to close at 8,943.
In the forward market, premium for dollar remained sluggish and ended lower on sustained receiving by exporters.
The benchmark six-month premium for February declined to 185.5-187.5 paise from 187-189 paise and the forward August 2017 contract also moved down to 376.5-378.5 paise against 378.5-380.5 paise last Friday.
Crude prices dropped from its one-week high in Asian trading towards USD 47 a barrel on fading hopes for imminent action to tackle a supply glut after Saudi Energy Minister said there was no need to freeze output for now a day after top producers Russia and Saudi Arabia agreed on Monday to cooperate on stabilising the world oil markets.