Mumbai: The rupee on Thursday strengthened by 39 paise at more than 2-week high of 63.73 against the American currency on persistent selling of dollars by banks and exporters amid expectations of resumption of foreign capital inflows in view of sustained rise in the equity market. Besides, lower dollar in the overseas market affected the market sentiment.
The rupee resumed higher at 63.95 as against Wednesday's closing level of 64.12 at the Interbank Foreign Exchange (Forex) and firmed up further to 63.70 before concluding at more than 2-week high at 63.73, a gain of 39 paise, or 0.61 per cent.
The local currency has gained 53 paise, or 0.82 per cent, in two days. The dollar index was trading lower by 0.49 per cent against its major global rivals in the late Asian trade. The dollar extended its losses against the yen and the euro in Asian trade on Thursday after a lack of clear commitment by the Federal Reserve to raise interest rates in September indicated continued caution at the US central bank.
In New York market, the dollar weakened against the yen and euro on Wednesday after Federal Reserve policy makers indicated in their latest policy statement that the pace of interest-rate hikes might be slower than previously expected. Meanwhile, the benchmark BSE Sensex ended higher by 283.17 points, or 1.06 per cent, at 27,115.83.
Commenting on rupee movement, Veracity Group CEO Pramit Brahmbhatt said, "The local currency appreciated over 39 paise as exporters were seen selling dollars at higher levels. "Also, local equities traded strong for the day which further helped rupee to appreciate over half per cent to close at 63.73 for the day". The trading range for the spot USD/INR pair is expected to be within 63.40 and 64.20, he added. In the forward market, the premium for dollar ended lower on fresh receivings from exporters.
The benchmark six-month premium payable in November dropped to 201-202 paise from 205-207 paise while those maturing in May, 2016 also closed lower at 426-427 paise from 431-432 paise on Wednesday. The RBI fixed the reference rate for the dollar at 63.8495 and for the euro at 72.4564. The rupee dropped further against the pound sterling to 101.45 from 100.86 on Wednesday and moved down against the euro to 72.67 from 72.19 previously. The domestic currency fell against the Japanese unit to 51.97 per 100 yen from 51.77 previously.
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