Rupee ends 3 paise higher against USD

Rising for the second consecutive day, the rupee closed 3 paise higher at 66.19 against the US dollar on Wednesday on fag-end selling of the greenback by banks and exporters.

The local currency opened lower at 66.32 as against yesterday's closing level of 66.22 at the Interbank Foreign Exchange (Forex) market and eased further to 66.33 on initial demand for the American currency from banks and importers on the back of higher dollar in the overseas market.

However, it washed out initial losses and recovered to 66.11 on selling of dollars by exporters before finishing at 66.19, showing a gain of three paise or 0.05 per cent.

The rupee has gained 29 paise, or 0.44 per cent, in the two days.

In the global market, the US dollar index, which tracks the greenback against a basket of six major rivals, was up by 0.33 per cent.

However, the US dollar slumped against its major rivals in late trade yesterday, after a weak reading on Chinese manufacturing activity reignited investors' fears about a sharp slowdown in the world's second-largest economy.

Meanwhile, the benchmark BSE Sensex dropped 242.88 points, or 0.95 per cent, to settle at 25,453.56 today.

Veracity Group CEO Pramit Brahmbhatt said, "Compared to past few days, not much movement was seen in the USD/INR pair today.

"The rupee traded range-bound as investors preferred to be cautious in an uncertain market.

Local equities closed on a weak note, taking cues from global markets which dented the rupee movement."

The trading range for the Spot USD/INR pair is expected to be within 65.70 to 66.70. In forward market, the premium for dollar inched up on mild paying pressure from corporates.

The benchmark six-month premium payable in February inched up to 213.75-214.25 paise from 212.5-214.5 paise previously and far-forward August 2016 contracts moved up to 433-434 paise from 429.5-431.5 paise previously.

The RBI fixed the reference rate for the dollar at 66.1638 and for the euro at 74.6063.

The rupee moved up further against the pound sterling to close at 101.08 from 101.66 yesterday and recovered against the euro to 74.52 from 74.58 previously.

It also recovered against the Japanese currency to finish at 55.12 per 100 yen from 55.18 yesterday.