There was fresh selling of the American currency by banks and exporters
The rupee on Wednesday recovered by 13 paise to close at one-month high of 67.05 a dollar on fresh selling of the American currency by banks and exporters in view of sustained inflows from foreign funds amidst weakness of dollar in the overseas market.
The rupee opened higher at 67.10 as against Tuesday's closing level of 67.18 at the Inter-bank Foreign Exchange (Forex) market and firmed up further to 67.0275 before closing at one-month high of 67.05, showing a gain of 13 paise or 0.19 per cent.
The rupee had last settled at 66.76 per dollar on June 10, 2016.
The rupee hovered in a range of 67.0275 and 67.2150 per dollar during the day.
The dollar index was trading lower by 0.12 per cent against a basket of six currencies in the late afternoon trade.
Meanwhile, the RBI fixed the reference rate for the dollar at 67.2046 and euro at 74.3484.
In cross-currency trades, the rupee moved down further against the pound sterling to end at 89.00 from 88.27 yesterday while recovered against the euro to 74.27 from 74.46.
The domestic currency continued to rule firm against the Japanese yen at 64.07 per 100 yen from 64.73.
Pramit Brahmbhatt of Veracity Financial Services said, "The rupee opened stronger by 8 paise at 67.10/USD compared to previous close of 67.18/USD, on back of positive cues from global equity market."
“Taking cues from domestic equity market, the rupee remained positive for the day, but faced resistance at 67/USD. In domestic equity market, we witnessed mild profit booking at higher levels, thus to close the day Nifty ended with negligible loss of 2 points at 8,519 levels. Thus the rupee ended with a gain of 13 paise at 67.05/USD. Trading range for the spot USD/INR pair will be 66.80 to 67.20/USD," he added.
Overseas, the US dollar was trading mixed against its major rivals in early Asian trade, while the yen clawed back some of this week's losses, after it sank to 2-1/2-week lows reached this week as the prospects for more economic stimulus in Japan helped bolster risk sentiment.
However, the yen inched higher against the dollar towards to the end of the day, after Japan's top government spokesman ruled out implementing so-called 'helicopter money', that involves a central bank directly buying government bonds to finance government spending or tax cuts.
Improved sentiment on hopes for Japan's fresh fiscal stimulus have helped boost Tokyo stocks by 8 per cent so far this week and caused unwinding of bullish yen bets. Investors have flocked to the safe-haven yen since the UK vote to leave the European Union last month.
Meanwhile, the benchmark Sensex ended steady at 27,815.18.
Oil prices turned lower again in Asia today after data indicated a rise in US stockpiles, reigniting concerns about a supply glut, while profit-takers stepped in after the previous day's surge.
In the forward market, premium for dollar finished narrowly mixed due uneven demand and supply transactions, a forex dealer said.
The benchmark six-month premium for December eased to 187.5-188.5 paise from 188-190 paise yesterday while forward June 2017 contract edged up to 387-388 paise from 386-388 paise.
Photograph: Reuters
