Rupee jumps 23 paise against dollar to end at 54.20
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Rupee jumps 23 paise against dollar to end at 54.20

Last Updated: Wednesday, November 07, 2012, 18:24
 
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Rupee jumps 23 paise against dollar to end at 54.20
Mumbai: The rupee on Wednesday appreciated by a robust 23 paise, its biggest gain in two weeks, to settle at 54.20 on the back of capital inflows and dollar selling by exporters amid hopes that US President Barack Obama will allow US Fed to maintain its quantitative easing programme.

Weakness in dollar against major rivals in overseas markets also helped rupee rally, forex dealers said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed higher at 54.29 a dollar from previous close of 54.43. It improved further to a high of 53.96 on sustained dollar selling by exporters and some banks.

Capital inflows worth USD 130 million in stocks also boosted the rupee sentiment, said bankers.

Analysts said Obama's win was likely to ensure continuity in monetary policy in short term, after his challenger Mitt Romney expressed unease over the US Fed's quantitative easing programme where it increases dollar supply by buying bonds.

However, some late dollar demand from importers pulled rupee down to a low of 54.37 before settling at 54.20, still showing a rise of 23 paise or 0.42 percent. This is biggest singe-day gain since October 22 when it rose 37 paise.

The dollar index, a gauge of six major global rivals, was down by 0.09 percent after Obama won re-election, with traders tying the weakness to a increase in risk appetite and lower attraction to safe-haven assets like dollar.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "Obama winning the second term in US Presidential polls boosted the global risk mood, pushing dollar index lower."

However, the overall view is still bearish for the rupee and any 40-50 paise dip should be used as an opportunity by the importers to hedge their open exposures, said Abhishek Goenka, Founder & CEO, India Forex Advisors.

Meanwhile, the Indian stock market benchmark Sensex Wednesday closed up by 85 points, completing its straight six-day gaining string.

"Exporters selling and rising capital inflows continued to induce gains in rupee. The domestic equity markets also edged higher," Brahmbhatt said.

The premium for the forward dollar ended steady to firm on stray payments from banks and corporates.

The benchmark six-month forward dollar premium payable in April closed at 161-163 paise from its overnight level of 161-162 paise.

Far-forward contracts maturing in October recovered to 299-301 paise from 294-296 paise.

The RBI has fixed the reference rate for the US dollar at 54.2520 and for euro at 69.8325.

The rupee remained firm against the pound sterling to 86.67 from Tuesday's close of 87.01 and also improved further to 69.48 per euro from 69.66.

It also advanced further against the Japanese yen to 67.54 per 100 yen from overnight close of 67.88.

PTI


First Published: Wednesday, November 07, 2012, 18:24


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