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Weekly review: Rupee makes strong comback against dollar; ends at a near 21-month high

Halting a two straight weeks of downfall, the rupee made a strong comback against the US currency and ended at a near 21-month high of 64.24 - surging by a good 37 paise on heavy dollar selling by exporters and corporates.



New Delhi: Halting a two straight weeks of downfall, the rupee made a strong comback against the US currency and ended at a near 21-month high of 64.24 - surging by a good 37 paise on heavy dollar selling by exporters and corporates.

This is the rupee's highest closing since August 11, 2015, when it had ended at 64.19 against the greenback.

A collective sigh of relief largely drove global currency and financial markets higher worldwide at the start of the week on waning anxiety over the European political landscape.

The overall forex market sentiment witnessed sustained buoyancy supported by unwinding of long-dollar positions by speculators against the backdrop of rising risk-on sentiment.

The momentum also got an additional push on growing expectations for robust foreign inflows to India sparked by a renewed optimism about the US economy.

Healthy FII inflows into equities and debt also supported the recovery momentum.

Foreign investors pumped in a staggering USD 3 billion in the capital markets this month so far as regulator Sebi has raised investment limit for FPIs in government debt.

Though, currency traders kept an eye on recent geopolitical developments.

The incredible bullish sentiment seems to be borne out of a weaker dollar which also provided a boost for emerging market currencies, a forex dealer commented.

However, the RBI intervened in the market through state-run banks in both the spot and the forward markets to prevent further gains in the rupee, he added.

The domestic currency resumed higher at 64.55 from last Friday's closing value of 64.61 at the Interbank Foreign Exchange market and powerheaded relentlessly to hit multi-year high of 63.93 on Wednesday supported by overall positive momentum.

However, some month-end dollar demand from importers alongwith RBI's tight interventions to check the rupee's intraday day volatility, shaved off strong early gains towards the fag-end trade.

It finally settled at 64.24, showing a smart gain of 37 paise, or 0.57 percent.

In worldwide trade, the greenback succumbed to intense selling on disappointment over U.S. President Donald Trump's much awaited tax plan amid caution ahead of US Federal Reserve meet next week.

Adding to recent uncertainty about the economy, macro data showed that US economic growth in the first quarter of the year slowed to the weakest pace since 2014.

The dollar index a measure of the US currency against a basket of peers declined further to settle at 98.89 from last weekend level of 99.66.

Meanwhile, the euro was the big winner after the French vote ? hitting a five-month high against the dollar and Sterling also jumped near its strongest since October.

With PTI Inputs

From Zee News

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