Rupee strengthens by 2 paise to 66.42

  • PTI, Mumbai
  • Updated: May 03, 2016 18:36 IST
The rupee had lost 11 paise to close at 66.44 against the dollar Monday on fresh demand for the American unit from banks. (REUTERS)

The rupee trimmed its initial gains against the American currency and closed marginally up by 2 paise to 66.42 on selling of dollars by banks and exporters amidst fall in equity market.

The rupee opened higher at 66.35 as against Monday’s closing level of 66.44 per dollar at the Interbank Foreign Exchange (Forex) market and firmed up further to 66.2250 on heavy selling of dollars by banks and exporters on the back of lower greenback in the overseas market.

But, it trimmed its initial gains and dropped to 66.4650 on fag-end dollar demand from banks before ending at 66.42, still showing a gain of mere 2 paise or 0.03%.

The rupee had dropped by 11 paise or 0.17% Monday.

The domestic unit hovered in a range of 66.2250 and 66.4650 per dollar during the day.

The dollar index was down 0.35% against a basket of six global currencies in the late afternoon trade.

Meanwhile, the RBI fixed the reference rate for the dollar at 66.2698 and euro at 76.6145.

In cross-currency trades, the rupee declined further against the pound sterling to finish at 97.40 from 97.31 Monday.

It also moved down further against the euro to 76.91 per euro from 76.28 per euro previously.

The domestic currency also dropped further against the yen to 62.78 per 100 yens from 62.20.

In overseas market, the dollar set a fresh 18-month low versus the yen early Asian trade, as the yen rose in a holiday-thinned market.

The euro broke above USD 1.16 on more bets that US interest rates won’t go up this year, while the Australian dollar dived after that nation’s central bank cut interest rates.

The Japanese yen also renewed its advance against the dollar.

The shared currency is trading at levels last seen in August, building on the prior day’s gain. On Monday, the euro broke above USD 1.15 as the view that the Federal Reserve could stand pat on interest rates for the rest of 2016 was seen gaining traction.

Pramit Brahmbhatt of Veracity Financial Services said, “The rupee opened stronger by 9 paise at 66.35/USD by weakening dollar, as the rupee taken cues from domestic as well as global equity market. Heavy selling pressure in domestic equity market wiped out all early gains in the rupee and dollar appreciated there after.

“Our market benchmark index Nifty fell down nearly 150 points from high point of the day. Thus to end the day the rupee closed appreciating by 2 paise to 66.42/USD.”

Meanwhile, the benchmark BSE Sensex ended lower by another 207.27 points or 0.81% to close at 25,229.70.

In forward market, premium for dollar firmed up due to paying pressure from corporates.

The benchmark six-month premium for October moved up to 212.5-213.5 paise from 210-212 paise Monday and far forward April 2017 contract also hardened to 409-410 paise from 404.5-405.50 paise.

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