Snapping its two-day losing streak, the rupee recovered by 15 paise at 65.49 against the US dollar on Wednesday on fresh selling of the American currency by banks and exporters despite a higher greenback in overseas markets.
The domestic currency opened higher at 65.56 as against Tuesday’s closing level of 65.64 at the Interbank Foreign Exchange (Forex) market and firmed up further to 65.46 before ending at 65.49, showing a gain of 15 paise or 0.23.
The rupee had dropped 37 paise or 0.57 in the previous two days.
It moved in a range of 65.46 and 65.62 per dollar on Wednesday.
The dollar index traded higher by 0.26 against a basket of six currencies in late afternoon trade.
In the global market, the dollar rose against the euro and the yen on Wednesday, driven by higher US Treasury yields which rose on expectations that the Federal Reserve will increase interest rates in December.
The US government bond yields rose to their highest levels in nearly seven weeks yesterday as investors have been lightening up on their bond holdings following the Fed’s signal a week ago that a rate increase before the end of this year remains on the table.
Meanwhile, the benchmark BSE Sensex fell by 37.67 points, or 0.14, to settle at 26,552.92. In forward market on Wednesday, premium for dollar eased further.
The benchmark six-month premium payable in April eased further to 208-210 paise from 209.5-211 paise previously and far forward October 2016 contract also moved down to 417-419 paise from 418-419.5 paise.
The RBI fixed the reference rate for the dollar at 65.5680 and for the euro at 71.7970.
The rupee recovered against the pound sterling to finish at 100.98 from 101.22 previously and also recouped against the euro to 71.53 from 72.09.
The domestic currency also firmed up against the Japanese unit to 54.02 per 100 yen from 54.32.