The rupee on Tuesday rose 14 paise to 62.46 against the dollar, supported by better-than-expected current account data and a weakening U.S. currency.
Fresh dollar sales by exporters also helped the rupee. However, capital outflows capped the gains, a dealer said.
The rupee resumed stable at the previous closing level of 62.60 a dollar and touched a low of 62.61 at the inter-bank foreign exchange market. It later climbed to a high of 62.17 as local equities recovered and exporters sold dollars.
The rupee pared its mid-session gains on late dollar demand from importers and fell to settle at 62.46, a rise of 14 paise or 0.22 per cent.
Traders said the U.S. government shutdown is seen having a negative impact on economic growth, which may delay the tapering of the Fed’s massive bond-purchase programme.
“Yesterday, the current account data was released, which was better than expectations and that helped the rupee to post gains against the U.S. dollar,” said Abhishek Goenka, CEO of India Forex Advisors. “It came out at USD 21 billion against expectations of $23 billion for the April-June quarter.”
On Tuesday, after the news came regarding U.S. government’s shutdown, the rupee reacted positively as the US dollar index fell.
The 30-share S&P BSE Sensex firmed up 137.38 points or 0.71 per cent. Foreign institutional investors sold a net $83.55 million of shares yesterday, as per SEBI data.
“Dollar index is losing for the second consecutive day as the US government began a partial shutdown on Tuesday...which helped the rupee to trade strong,” said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).