Rupee snaps 2-day losing run, ends up by 7 paise

In forward market, premium for dollar continued to fall due to persistent receivings from exporters.

Snapping its two-day losing streak against the American currency, the rupee recovered by seven paise to 66.64 on fag-end selling of dollars by banks and exporters in view of persistent foreign capital inflows into equity market. 

The rupee resumed lower at 66.75 as against Tuesday’s closing level of 66.71 at the Interbank Foreign Exchange market and dropped further to 66.95 on initial dollar demand from banks and importers on the back of higher greenback in the overseas market. 

However, it recouped afterwards to 66.62 on fag-end selling of dollars by banks and exporters on hopes of more foreign funds into domestic equity market before ending at 66.64, showing a gain of 7 paise or 0.10 per cent. 

It had dropped by 21 paise or 0.32 per cent in last two days. 

The domestic currency hovered in a range of 66.62 and 66.95 per dollar during the day. 

Meanwhile, the dollar index was up 0.17 per cent against a basket of six currencies in the late afternoon trade. 

Overseas, the US dollar pushed higher across major currencies in the later afternoon trade, drawing support from comments by Federal Reserve officials and dissipating nervousness over the Brussels terror attacks, which drew investors away from the traditional safe haven shelter of the yen. 

Meanwhile, foreign funds (FPP and FIIs) continued their buying spree on Wednesday as they bought shares worth Rs 1,095.44 crs as per the stock exchanges record. 

However, the Indian benchmark Sensex moved up 7.07 points or 0.03 per cent to close at 25,337.56. 

Pramit Brahmbhatt of Veracity Financial Services said," as expected the rupee opened on a negative note as dollar index was positive. Weakness in domestic equity market helped USD to gain but maintained resistance of 66.80/USD. Late recovery in domestic equity market helped the rupee to gain lost ground." 

Domestic equity market closed with a negligible gain of 2 points at 7717 levels. Thus to end the day, the rupee closed with a gain of 7 paisa at 66.64/USD. 

Trading range for the spot USD/INR paid is expected to be within 66.20-66.80/USD. 

In forward market, premium for dollar continued to fall due to persistent receivings from exporters. 

The benchmark six-month premium for August ended steady 202-204 paise while far forward February 2017 contract moved down further to 406-408 paise from 409-411 paise. 

The RBI fixed the reference rate for the dollar at 66.8640 and euro at 74.9077. 

In cross-currency trades, the rupee firmed up further against the pound sterling to finish at 94.55 from 95.28 yesterday and also moved up further to 74.60 per euro from 74.76. 

The rupee recovered against the yen to 59.17 per 100 yens from 59.69 previously.