Mumbai: The rupee on Wednesday strengthened by 11 paise to end at 54.07 on persistent selling of dollars by exporters and moderate capital inflows, amid reports of low volumes due to the ongoing two-day bank union strike.
The rupee resumed higher at 54.10 per dollar as against the last closing level of 54.18 per dollar at the Interbank Foreign Exchange (Forex) Market.
During the session, rupee hovered in a range of 54.03 per dollar and 54.21 per dollar, before ending at 54.07 per dollar, a gain of 11 paise or 0.20 per cent over Monday.
Yesterday, forex markets were closed on account of 'Chhatrapati Shivaji Maharaj Jayanti'.
"The gains in rupee were on account of recovery in the Euro and the weakness in the dollar index. Rupee is seen taking cues from the global factors," said Abhishek Goenka Founder & CEO, India Forex Advisors.
Normal banking operations were hit today as employees of public sector banks went on a two-day strike in response to a call given by central trade unions to press for wage hike in the backdrop of rising inflation.
A senior public sector bank official said there were some reports of drop in forex market volumes due to the strike.
However, Ashtosh Raina, head of foreign exchange trading at HDFC Bank, said: "No. There was not much impact in the forex markets due to this strike."
FIIs today pumped in Rs 434 crore in Indian equities as per provisional data. The Indian benchmark Sensex inched up by 7.03 points, or 0.04 per cent, to end at 19,642.75.
The premium for the forward dollar ended higher on sustained payments from banks and corporates.
The benchmark six-month forward dollar premium payable in July edged up to 175-177 paise from Monday's closing level of 174-176 paise.
Far-forward contracts maturing in January also moved up to 341-343 paise from 339-341 paise.
The RBI fixed the reference rate for the US dollar at 54.0510 and for euro at 72.5355.
The rupee shot up further against the pound sterling to 82.79 from Monday's close of 83.80, while fell back against the Japanese Yen to close at 57.80 per 100 yen from 57.66.
It, however, remained weak against the euro to end at 72.42 from last close of 72.32.