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Rupee Climbs to Over 1-week High on Weak Dollar, GST Hopes

Representative image. (Image: REUTERS)

Mumbai: The rupee continued its impressive run against the broadly weak dollar for the second straight day, surging by a solid 15 paise to end at 67.95 amid hopes for a speedy roll-out of GST.

Sustained dollar unwinding from banks and exporters in the face of sluggish greenback overseas predominantly helped the domestic currency to overcome initial volatility and bounce back.

The American dollar remained under immense pressure ahead of US president-elect Donald Trump’s inauguration at the end of the week and today’s speech by UK Prime Minister Theresa May.

Forex market sentiment also got a boost on the GST roll-out after the Centre and states yesterday reached a consensus on sharing powers for control over taxpayers under GST. However, the roll-out is now expected from July 1, against the previously planned April 1.

At the Interbank Foreign Exchange (forex) market, the local unit resumed higher at 68.06 as compared to overnight closing value of 68.10, but immediately fell back to hit a low of 68.13 briefly on stray dollar demand.

However, it staged a resounding bounce in afternoon deals on the back of adequate dollar supplies and managed to end at the session’s high of 67.95, showing a smart gain of 15 paise, or 0.22 per cent.

In worldwide trade, the US dollar remained lower against major and emerging market currencies.

Meanwhile, Pound sterling recovered sharply from multi-decade low against the US Dollar on news of stronger- than-expected UK inflation in December.

The US dollar index was trading sharply weak at 100.49 in late afternoon session.

The RBI fixed the reference rate for the dollar at 68.0509 and for the euro at 72.5014.

In cross-currency trades, the rupee retreated against the pound sterling to settle at 82.72 from 82.11 and drifted against the euro to finish at 72.73 as compared to 72.13 yesterday.

It also dropped further against the Japanese Yen to conclude at 60.23 per 100 yens from 59.63..

Source: News18