Tracking a recovery in local shares, the Indian rupee on Friday snapped a two-day declining trend and bounced back by 39 paise to end at 61.44 against the Greenback on fresh dollar selling by exporters and some banks.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced higher at 61.70 a dollar from previous close of 61.83. Soon after, it touched a low of 61.7450 on initial hesitancy in local equities.
However, the rupee rebounded on smart rise in domestic shares and fresh dollar selling by exporters and some banks to a high of 61.42. It concluded for the day at 61.44, showing a rise of 39 paise or 0.63 per cent. In previous two sessions, it had tumbled by 73 paise or 1.19 per cent.
The benchmark S&P BSE Sensex on Friday snapped its two-day fall and recovered by 109.19 points, or 0.42 per cent. Foreign Portfolio Investors (FPIs) sold shares worth USD 178.45 million on Thursday. They have pulled out USD 612.74 million in the current month so far.
The dollar index was down by 0.11 per cent against major global rivals.
Pramit Brahmbhatt, Veracity Group, CEO, said: “To end the week, rupee appreciated over half a per cent on the last trading day. This was helped by local equities that closed up by almost half a per cent for the day.
“However, rupee on a weekly basis posted its fifth weekly fall in six. The trading range for the spot rupee is expected to be within 61.00 to 62.00.”
“The Indian Rupee strengthened today on dollar sales by foreign banks. The local currency was supported after St. Louis Federal Reserve President James Bullard said the U.S. central bank may want to maintain its bond buying for now given a drop in inflation expectations,” said Suresh Nair, Director, Admisi Forex India Pvt Ltd.
“Markets had interpreted this statement as dovish, since it could mean extended flows into emerging market economies. U.S. policymakers have said they expect to end the bond—buying programme at its next policy meet on Oct 28—29,” he added.
In the forwards market, premium turned positive on fresh payments by some banks and corporates.
The benchmark six—month premium payable in March edged up to 210—212 paise from previous close of 209—211 paise.
Far—forward contracts maturing in September, 2015 rose to 433—435 paise from 427—429 paise.
The Reserve Bank of India fixed the reference rate for dollar at 61.6165 and for the Euro at 78.8938.
The rupee softened further against the pound to 99.00 from last close of 98.88 while recouped to 78.76 per euro from 78.90. It also bounced back to 57.68 per 100 Japanese yen from 58.48.
