Nov 23 (PTI) The rupee staged a robust rebound and ended at a fresh three-week high of 64.58 a dollar, surging by a whopping 34 paise after FOMC minutes signalled shallow rate hike path.
A massive slide in US dollar overseas mainly forced banks and exporters to unwound their long dollar bets along with dovish sound of Fed meet minutes outcome, paving the way for rupee to gain strongly, according to traders.
Abundant capital inflows from foreign investors into equity and debt markets predominantly catapulted the blistering rally.
This is the highest closing for the home currency since November 3.
Globally, the dollar endured its biggest drop in months against other major currencies on Thursday after the minutes of the Fed’s latest meeting showed that some policymakers remain concerned over persistently low inflation.
Brent crude, the international benchmark, is trading marginally lower at USD 62.75 a barrel in early Asian trade.
In the meantime, local equities extended their winning run for the sixth-straight session led by strong gains in technology companies despite profit-taking at higher levels.
Asian markets were mostly lacklustre amid massive plunge in China stocks and bonds even as the US Thanksgiving break loomed invitingly.
The Indian unit opened on a highly positive note at 64.80 against Wednesday’s close of 64.92 at the Interbank Foreign Exchange (forex) market on adequate dollar supply.
Maintaining its highly bullish trend, the home unit scaled a fresh intra-day high of 64.57 in mid-afternoon deals before ending at 64.58, showing a smart rise of 34 paise, or 52 %.
The rupee had settled 3 paise lower on Wednesday. .
The RBI, meanwhile, fixed the reference rate for the dollar at 64.7949 and for the euro at 76.6264.
In cross-currency trades, the rupee softened against the pound sterling to end at 85.96 from 85.93 per pound and dropped further against the Euro to finish at 76.51 from 76.29.
It also drifted further against the Japanese yen to conclude at 58.13 per 100 yens from 57.94.
The dollar index, which measures the greenback’s value against a basket of six major currencies, was down at 93.06 in early trade.
Elsewhere, the common currency euro rebounded sharply against the US dollar after data showed Eurozone manufacturing and services activity jumped to the highest level in 17 years.
The British pound traded firmly higher after reports showed the GDP growth in the UK economy accelerated slightly in the third quarter of this year in line with expectations amid some fresh optimism stemming from the Brexit negotiation.
In forward market today, premium for dollar remained extremely weak owing to persistent receiving from exporters.
The benchmark six-month premium payable in April edged lower to 117-119 paise from 119-121 paise and the far forward October 2018 contract also moved down to 257-259 paise from 258-260 paise on We.
On the International energy front, oil prices eased on Thursday, with US crude falling away from two-year highs reached the day before, but the shutdown of the Keystone pipeline and a draw-down in fuel inventories continued to bolster markets despite worries over rising output.
US West Texas Intermediate (WTI) crude futures were at USD 57.89 a barrel, down 13 cents, or 0.2 percent after revisiting 2015-highs of USD 58.15 a barrel on Wednesday.
Brent crude futures were at US 63.14 per barrel, 18 cents, or 0.3 %, below their last close.
