Rupee Logs 3rd Straight Gain, Rises 14 Paise Against Dollar

Published date: .

PTI|

Jun 22, 2018, 08.16 PM IST

Newrupee1-thinkstock
Fresh capital inflows and an encouraging rally in domestic equities revived forex market sentiment.

The

rupee

continued its rally for a third straight session today, strengthening by another 14 paise to end at 67.84 against the US dollar amid sustained unwinding of American currency by exporters.

Fresh capital inflows and an encouraging rally in domestic equities revived forex market sentiment.

Foreign funds and investors turned net buyers after a long selling spell and bought shares worth a net Rs 1,126.75 crore, provisional data showed.

Additionally, expectations with regard to relaxation in the current oil supply quotas ahead of the crucial OPEC meeting on the output policy also weighed on the trading front.

The Indian unit oscillated between 67.70 and 67.88 most part of the day.

However, the rupee retreated against British pound, euro and Japansese yen.

Both oil kingpins Saudi Arabia and Russia look to maintain market stability amid possible supply shocks from rapidly declining production from Venezuela and potential production losses from Iran.

The recent spike in crude prices adversely impacted the twin deficits of current account and fiscal, witnessing spillover effects on monetary policy along with inflationary front.

Meanwhile, the greenback began easing from an 11-month peak against a basket of major currencies as investors booked profits in early Asian trade.

On the energy front, global crude prices shot up over 1 per cent, lifted by uncertainty over whether OPEC would manage to agree a production increase at a meeting in Vienna later in the day.

OPEC will seek agreement on Friday to raise oil production despite opposition from Iran, which has threatened to block the move as it faces export-crippling US sanctions.

Brent crude futures, an international benchmark, is trading sharply down at USD 74.10 a barrel, in early Asian trade.

The bond market, however, succumbed to fresh selling pressure after four-day rally ahead of weekend.

The 10-year benchmark bond yield rose to 7.82 per cent from 7.77 per cent.

At the interbank foreign exchange (forex) market, the local currency opened higher at 67.81 against Thursday's close of 67.98.

After trading in a tight range early session, the rupee extended gains in afternoon trade, underpinned by greenback sales by foreign banks to hit a high of 67.70 before ending at 67.84, showing a rise of 14 paise, or 0.21 per cent.

For the week, the Indian currency rebounded by 17 paise after two-straight weekly fall.

The RBI, meanwhile, fixed the reference rate for the dollar at 67.7695 and for the euro at 78.8566.

The dollar index, which measures the greenback's value against basket of six major currencies, was down at 94.28.

In the cross currency trade, the rupee dropped further against the pound sterling to settle at 90.08 per pound from 89.88 and fell back against the euro to finish at 78.96 as compared to 78.47.

The home unit also drifted against the Japanese yen to close at 61.59 per 100 yens from 61.51 earlier.

Elsewhere, the euro made a spirited rebound from its 11-month low against the American currency after the Eurozone creditors agreed on debt restructuring with Greece while the Eurozone composite PMI rose to 54.8 in June, up from 54.1 in May beating the market forecast.

The British pound rebounded from a seven-month low after a slightly hawkish tilt from the Bank of England surprised the market.

As was widely expected, the UK central bank left interest rates on hold but the hawkish surprise came from the MPC vote count, which raised odds of an August rate hike.

In forward market today, premium for dollar turned lower owing to mild receiving from exporters.

The benchmark six-month forward premium payable in October softened to 100-102 paise from 100-102.50 paise and the far-forward April 2019 contract inched down to 245-247 paise from 245.50-247.50 paise previously.



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