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Rupee Continues Rally Against Dollar, Hits 21-Month High

The rupee continued its firming trend to log a near 21-month high of 64.26, by surging 18 paise against the US currency on Tuesday.
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This is the rupee's highest closing since August 11, 2015
This is the rupee's highest closing since August 11, 2015

Highlights

  1. The rupee surged 18 paise against the US currency
  2. This is the rupee's highest closing since August 11, 2015
  3. Nifty ended at a historic high of 9,300-level session

Mumbai: The rupee continued its firming trend to log a near 21-month high of 64.26, by surging 18 paise against the US currency on sustained dollar unwinding from exporters and corporates amid positive global cues.

This is the rupee's highest closing since August 11, 2015, when it had ended at 64.19 against the greenback. Overall forex market sentiment remained buoyant as French election outcome removed some of the political uncertainties in the near term even as global equities hit multi-year highs.

Though, currency traders are keeping an eye on events in North Korea as a US carrier group heads for the Sea of Japan. Domestic bourses joined the global relief rally with the Nifty ending at a historic high of 9,300-level session following a broad-based rally as investor confidence soared tracking strong earnings from some key firms amid highly positive global cues.



The flagship Sensex soared 287.40 points to finish at 29,943.24, while Nifty jumped 88.65 points to 9,306.60. The incredible bullish sentiment seems to be borne out of a weaker dollar which also provided a boost for emerging market currencies, a forex dealer commented.

However, the RBI intervened in the market through state-run banks in both the spot and the forward markets to prevent further gains in the rupee, he added.

The greenback traded modestly higher against major trading counterparts as well as anticipation that President Donald Trump will unveil his tax plan on Wednesday aimed at spurring growth in the US economy. The domestic currency resumed a tad higher at 64.42 from Monday's close value of 64.44 at the Interbank Foreign Exchange market.

Maintaining its strong momentum, the home unit touched a high of 64.21 in mid-afternoon deals before ending at 64.26, revealing a solid gain of 18 paise, or 0.28 per cent. Yesterday, the rupee has appreciated 17 paise. The RBI, meanwhile, fixed the reference rate for the dollar at 64.2776 and for the euro at 69.8569.

Meanwhile, the dollar index, which tracks the US currency against a basket of six major rivals, was down 0.05 per cent at 98.86.

In cross-currency trade, the local unit recovered against the pound sterling to finish at 82.40 from 82.61 per pound and also bounced back against the euro to settle at 69.90 compared to 69.95 earlier.
The local currency firmed up further against the Japanese Yen to conclude at 58.14 per 100 yens from 8.45 yesterday.

In the forward market today, premium for dollar dropped further due to consistent receivings from exporters. The benchmark six-month premium for September drifted to 140-142 paise from 143-145 paise and the far-forward March 2018 also declined to 298-301 paise from 303-305 paise on Monday.

In the global commodity front, crude prices crept up after six straight sessions of losses amid concerns that further production cuts will do little to curb market glut.

The brent crude futures was up 8 cents at $51.68 a barrel, while US crude futures were up 10 cents at $49.33 a barrel in early Asian trade.



(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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