Weekly Review: Rupee stages a spectacular recovery against dollar

The forex market sentiment also got a boost from the domestic equities' which scaled their life highs and also expectation of good monsoon reviving rural demand, soft interest rates and strong lending growth for the region's third largest economy.

Weekly Review: Rupee stages a spectacular recovery against dollar

New Delhi: The rupee staged a spectacular recovery against the American currency after a brief setback and ended firmly higher at 64.31 on fresh bouts of dollar selling by exporters and banks.

It settled the highly volatile week with a modest 7 paise gain.

The forex market sentiment also got a boost from the domestic equities' which scaled their life highs and also expectation of good monsoon reviving rural demand, soft interest rates and strong lending growth for the region's third largest economy.

The Indian Meteorological Department (IMD) predicted monsoon rainfall will be higher than earlier forecast, which would give a booster dose to the rural economy.

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

Foreign funds bought local shares worth USD 343,74 million, according to provisional figures by stock exchanges.

But, the home currency suffered a mid-week crash - plunging sharply to script its biggest single-day loss this year before making a splendid rebound.

The rupee resumed higher at 64.27 from last Friday's closing value of 64.38 at the Interbank Foreign Exchange market (forex) on steady supplies of dollars and strengthened further to 64.19.

It suffered a sharp reversal on Tuesday in active trading to hit a low of 64.7050 following frantic dollar demand from importers and banks.

However, overcoming the brief volatility, the rupee bounced back sharply towards the fag-end to settle at 64.31, showing a gain of 7 paise, or 0.11 percent.

In worldwide trade, the US dollar ended modestly lower on Friday, retreating from a roughly two-month high an otherwise positive week for the dollar its strongest in five weeks in knee jerk reaction to the disappointing US data.

Weaker-than-expected U.S. Economic data raised doubts about whether the Federal Reserve will assume a hawkish bent through the end of the year.

The dollar index a measure of the US currency against a basket of six trade-weighted peers ended higher at 99.05 from last weekend level of 98.42.

With PTI Inputs