Rupee snaps 3-day losing trend, up 25 paise against dollar
Mumbai: Snapping a three-day downtrend, the rupee on Thursday recouped early losses and ended the day with a hefty 25 paise gain at 55.66 on heavy dollar sales and fresh capital inflows.
The rupee commenced higher at 55.80 a dollar at the Interbank Foreign Exchange (Forex) market against yesterday's close of 55.91. With local stock market displaying weak trends in the morning, the rupee touched over six-week low of 56.03 amid initial dollar demand from importers.
However, the currency later staged a smart recovery to touch a high of 55.62 before settling at 55.66, a gain of 25 paise or 0.45 percent. Dealers said FIIs pumped in funds worth Rs 200 crore in Indian stocks today, which helped the rupee rise.
In last three days, it had fallen by 39 paise or 0.70 percent amid a stronger dollar. The dollar index, however, was down by 0.12 percent Thursday against a basket of six major currencies amid rising speculation that European Central Bank (ECB) would announce buying of distressed government bonds later in the evening.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The rupee regained its lost ground of first half towards the fag-end tracking rising global markets due to expectations of unlimited monetary stimulus from the ECB."
The dollar index though remained above the 81 levels but has been maintaining weak note, he said adding that the expectations of fuel price hike initially in petrol price by Rs 5 from OMCs also supported the rupee.
Meanwhile, the Indian stock market benchmark Sensex ended up by nearly 33 points in choppy trade.
The premium for the forward dollar ended steady amid stray payment pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in February settled at its overnight closing level of 176-178 paise.
The premium for far-forward contracts maturing in August recouped to 331-333 paise from 328-330 paise.
The RBI has fixed the reference rate for the US dollar at 55.9735 and for euro at 70.6140.
The rupee rebounded against the pound sterling to end at 88.56 from overnight close of 88.87 and also bounced back against the Japanese yen to 70.96 per 100 yen from 71.34.
It, however, softened further to 70.21 per euro from 70.20.