Rupee recovers from 20-month low, closes at 63.94 against dollar

Snapping its 5-session losing streak, the rupee on Friday gained 29 paise to 63.94, recovering from a 20-month low against the American currency on fresh selling of dollars by banks and exporters amid rebound in equities.

Snapping its 5-session losing streak, the rupee on Friday gained 29 paise to 63.94, recovering from a 20-month low against the American currency on fresh selling of dollars by banks and exporters amid rebound in equities.

The rupee resumed higher at 64.13 as against the last closing level of 64.23 at the Interbank Foreign Exchange market and firmed up further to a day's high of 63.90 per dollar before concluding at 63.94, showing a gain of 29 paise.

On Thursday, the domestic currency had dropped by 69 paise or 1.09% to 20-month low to 64.23 per dollar. The rupee had also dropped by 108 paise 1.71% during the last five days.

The rupee hovered in a range of 63.90 and 64.17 during the day.

Exporters and banks preferred to reduce their dollar position on hopes of resumption of foreign capital inflows on the back of recovery in the equity market.

In the New York, the dollar stuck in range against most of its major rivals in early trade ahead of US jobs report, but sterling rallied to its highest in just over a week on expectations that British Prime Minister David Cameron's Conservatives will stay in office.

The pound remained at its highest levels in a week today driven by news that the Conservative Party will likely win the UK election, after a night of surprises at the ballot box.

The dollar index was up by 0.20% on Friday against its six major global rivals.

Meanwhile, the Indian benchmark Sensex rose by 506.28 points 1.90% to 27,105.39.

Pramit Brahmbhatt, Veracity Group CEO, said, "Today the rupee recovered against US dollar and hit intra-day high of 63.90 taking cues from local equities which traded positive for the day". As we have seen the fresh dollar selling by exporters which further support the rupee however strengthening in dollar index capped the gain, he added.

The trading range for the Spot USD/INR pair is expected to be within 63.50 to 64.50.

In the forward market, the premium dropped moderately on fresh receivings by exporters.

The benchmark six-month premium payable in October moved down to 221.5-223.5 paise from 225-226 paise and forward contracts maturing in April 2016 fell to 439.5-441.5 paise from 443-445 paise on Thursday.

The Reserve Bank of India fixed the reference rate for dollar at 64.0493 and for the euro at 71.7608.

The rupee dropped further against the pound sterling at 98.68 from 97.83 previously while recovered against the euro to 71.76 from 72.82.

It firmed up against the Japanese yen to 53.24 per 100 yen from 53.92 on Thursday.