Rupee continues dominance over dollar, ends at 7-week high of 67.34
Hardening for the fifth consecutive day, the rupee on Thursday appreciated another 18 paise to trade at a 7-week high of 67.36 against the dollar on sustained bouts of selling of the US currency by banks and exporters amid foreign capital inflows.business Updated: Mar 03, 2016 20:37 IST
The rupee rose for the fifth straight session to close at a fresh 7-month high of 67.34, strengthening by another 20 paise on sustained selling of dollars by banks and exporters amid strong rally in domestic equity market.
The domestic currency was further supported by unwinding of long-dollar positions by speculators.
The domestic unit resumed higher at 67.40 per dollar as compared to Wednesday’s closing value of 67.54 at the Interbank Foreign Exchange market and kept the momentum going.
It touched a fresh intra-day high of 67.28 during the session on the back of heavy dollar selling before concluding at 67.34, revealing a smart gain of 20 paise, or 0.30%.
The rupee has been a notable beneficiary of this post-Budget euphoria as well as hopes of robust capital inflows and also supported by the long term potential of the Budget proposals.
It has gained by 138 paise, or 2.01% in five days - the longest winning run this year so far.
In the meantime, domestic equity markets continued their ferocious ascent for the third-straight session - its biggest post-Budget rally as sentiment turned highly buoyant following the government’s commitment to its fiscal deficit target amid expectations of a rate cut from the RBI.
Finance Minister Arun Jaitley maintained the fiscal deficit target for 2016-17 at 3.5% of the GDP.
On the global front, dollar lost ground against the major currencies and traded almost flat, reversing earlier gains despite strong US economic data flows.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 98.14, down 0.04%.
The flagship stock market index Sensex jumped 364.01 points to end at 24,606.99, while 50-share Nifty rose by over 107 points to 7,475.60. Foreign portfolio investors (FPIs) bought shares worth Rs 1,437.50 crore on Wednesday, according to provisional data from stock exchanges.
In forward market, premium for dollar softened on fresh receivings from exporters.
The benchmark six-month premium for August moved down to 221-223 paise from 223-225 paise on Wednesday and far forward February contract also inched down to 425-427 paise as against 426.5-428.5 paise earlier.
The RBI fixed the reference rate for the dollar at 67.3786 and euro at 73.1664.
In cross-currency trades, the rupee retreated against the pound sterling to finish at 94.67 from Wednesday’s close of 94.52 and also fell back against the yen to end at 59.09 per 100 yens from 59.04.
The domestic unit, however recovered against the euro to settle at 73.28 from 73.34.