Unwinding of long-dollar positions by speculative traders and the currency's strong underlying fundamentals buoyed the home unit
Rising for the fourth consecutive session, the rupee, on Tuesday, ended at a fresh two-week high of 66.50 on sustained selling of the US currency by exporters and banks despite higher greenback overseas.
A large uptick in foreign capital inflows into debt and equities largely supported the domestic unit to maintain its edge against the greenback.
Unwinding of long-dollar positions by speculative traders and the currency's strong underlying fundamentals further buoyed the home unit.
The rupee opened substantially higher at 66.54 from overnight close of 66.61 at the Interbank Foreign Exchange (forex) market and kept moving higher to hit an intra-day high of 66.4375 before concluding at 66.50 (its highest level since September 6), showing a smart gain of 11 paise, or 0.17 per cent.
The American dollar rose modestly following higher-than-expected new home sales data and was also supported by outcome of yesterday's first US Presidential debate amid anticipation that Democratic Party candidate Hillary Clinton will become the next US president.
The US dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.22 per cent at 95.42.
Meanwhile, RBI fixed the reference rate for the dollar at 66.4627 and euro at 74.7373.
In cross-currency trades, the rupee fell back modestly against the pound sterling and settled at 86.20 as compared to 86.15, while rebounded against the euro to end at 74.73 from 74.95, on Tuesday.
It also recovered against the Japanese yen to close at 66.28 from 66.34 per 100 yens.
Photograph: Reuters