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Rupee Rebounds 24 Paise to One-week High on Weak Dollar

Mumbai: The rupee on Thursday staged a spectacular recovery against the American currency by surging 24 paise to end at one-week high of 68.08 on fresh bouts of dollar selling from banks and exporters.

A rally in domestic equities along with heavy dollar unwinding by speculative traders post US President-elect Donald Trump’s press conference largely aided the recovery of the rupee, dealers said.

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 said.

Growing expectations over a sharp recovery in IIP numbers and further fall in retail inflation, which were released after market close, also weighed on trade, the dealer added.

Belying expectations of a slowdown due to demonetisation, industrial production in November grew by 5.7 per cent compared to a contraction of 3.4 per cent in the same month a year ago.

Also, retail inflation eased further to nearly 3-year low of 3.41 per cent in December.

The US dollar suffered volatility as investors were disappointed Donald Trump failed to offer more clarity around his stimulus plans and trade policies at the news conference, dealers said.

At the Interbank Foreign Exchange (forex) market, the home unit resumed on a firm note at 68.15 from Wednesday’s close of 68.32.

It hit an intra-day high of 67.9475 on heavy dollar selling before ending at 68.08, revealing a solid gain of 24 paise, or 0.35 per cent.

The rupee had lost 14 paise on Wednesday. The US dollar index fell to 100.80 – its lowest level since December 14 in late afternoon deals.

The RBI fixed the reference rate for the dollar at 68.0858 and for the euro at 72.2322.

In cross-currency trades, the rupee tumbled sharply against the pound sterling to end at 83.1940 from 82.93 and also retreated against the euro to settle at 72.2322 as compared to 71.89 earlier.

It also remained under immense pressure against the Japanese Yen and finished at 59.45 per 100 yens from 58.77 on Wednesday.

Source: News18