Top

Rupee firms up by 8 paise against dollar; Fed meet outcome eyed

Rupee is trading at 65.28 a dollar amid persistent selling of the greenback by banks and exporters.

Mumbai: Extending its recovery for the second straight session, the rupee on Tuesday strengthened by another 8 paise to 65.28 a dollar amid persistent selling of the greenback by banks and exporters.

Firming local equities coupled with bearish dollar sentiment overseas largely supported the forex market upmove.

Moreover, continued unwinding of long-dollar positions created by speculative traders ahead of the FOMC minutes release on Wednesday also played a key role.

But, amid all this growing expectations of a December Fed rate hike were intact, capping the rupee's sharp appreciation.

Most Asian and emerging market currencies benefited from the USD selling amid renewed geopolitical tensions.

Meanwhile, domestic equities extended a winning streak for the third straight day on select buying on expectations of robust second-quarter earnings season which gets underway this week.

The flagship Sensex jumped over 77 points to end at 31,924.41, while Nifty reclaimed the psychological 10,000 mark with a 28 points gain.

At the Interbank Foreign Exchange market, the local currency resumed little changed with positive bias at 65.35 compared to 65.36 yesterday and struggled for a firm direction.

However, overcoming the initial listlessness, the home currency surged ahead to hit a fresh intra-day high of 65.20 in late afternoon deals before ending at 65.28, showing a gain of 8 paise, 0.12 per cent.

It briefly touched a low of 65.36 during the trade.

On Monday, the domestic unit ended marginally up by 2 paise against the American currency.

The RBI, meanwhile, fixed the reference rate for the dollar at 65.2652 and for the euro at 76.8302.

On the global front, the dollar remained broadly lower against other major counterparts as worsening geopolitical concerns continued to dampen sentiment, overshadowing hopes for an upcoming rate hike by the Federal Reserve even as investors remained cautious following reports that North Korea was preparing a long-range missile test.

The dollar index, which measures the greenback's value against a basket of six major currencies, was trading weak at 93.16 in early trade.

In cross-currency trades, the rupee recovered modestly against the pound sterling to end at 86.07 from 86.11 per pound, but drifted further against the Japanese yen to settle at 58.05 per 100 yens from 58.02.

The local unit also showed continued weakness against the euro to finish at 76.89 from 76.75 on Monday.

Elsewhere, the pound strengthened against the dollar for the second successive day in the wake of data suggesting a more buoyant UK economy and room for the Bank of England to increase interest rates later this year.

The euro vaulted to one-week high after Germany's trade data blew past expectations, boosting hopes the eurozone economy's outlook remained robust amid political concerns -- notably Spain's Catalan crisis.

In forward market today, premium for dollar declined owing to mild receiving from exporters.

The benchmark six-month premium payable in March edged down to 129-131 paise from 130.75-132.75 paise from 130-132 paise and the far forward September 2018 contract also declined to 267-269 paise from 270-272 paise.

On the international energy front, crude prices surged ahead Oil rose to around USD 56 a barrel on Tuesday, supported by Saudi Arabian export cuts in November and comments from OPEC and trading companies that the market is rebalancing after years of oversupply.

Brent crude, the international price benchmark, was up 32 cents at USD 56.11 a barrel in early Asian trade. The US crude gained 29 cents to USD 49.87.

( Source : PTI )
Next Story