Weakness in dollar in the overseas market also boosted the rupee value
Continuing its gains against the US dollar for the fifth trading session, the rupee on Wednesday firmed up by another 12 paise to close at a 4-week high of 66.65 on sustained selling of the American currency by banks and exporters amid persistent foreign capital inflows.
Weakness in dollar in the overseas market also boosted the rupee value, a forex dealer said.
The rupee opened slightly lower at Rs 66.78 against Tuesday's closing level of Rs 66.77 per dollar at the Interbank Foreign Exchange (Forex) market in Mumbai.
However, it recovered afterwards to 66.62 per dollar before closing at 4-week high of 66.65, showing a gain of 12 paise or 0.18 per cent. The rupee had last ended at 66.62 per dollar on May 12, 2016.
It has gained 80 paise or 1.19 per cent in the last five trading days.
The domestic currency hovered in a range of 66.62 and 66.82 per dollar during the day.
Meanwhile, the dollar index was down by 0.23 per cent against the basket of six global currencies in the late afternoon trade.
Meanwhile, the RBI fixed the reference rate for the dollar at 66.7370 and euro at 75.8199.
In cross-currency trades, the rupee recovered against the pound sterling to end at 97.04 from 97.40 yesterday and fell against the euro to 75.83 per euro from 75.78.
The domestic currency also moved down against the yen to 62.25 per 100 yens from 61.97 yesterday.
The dollar lost ground today in the global market as the US interest-rate watch continues, but the greenback trimmed deeper losses after a relatively strong reading on Chinese imports.
The dollar has come under downside pressure as dismal US jobs data for May forced investors to adjust expectations about the timing of a rate increase.
Federal Reserve Chair Janet Yellen indicated this week that the central bank would hold back from raising rates until new uncertainties about the economic outlook are resolved.
Foreign portfolio investors and foreign institutional investors bought shares worth a net Rs 499.73 crore yesterday, as per provisional data released by the stock exchanges.
Pramit Brahmbhatt of Veracity Financial Services said, "The rupee opened on a positive note on continuing gain of previous trading session. Positive opening of domestic equity market extended rupee gains. We observed positive opening of Nifty but profit-booking at higher levels ended day with minor profit of 7 points at 8,273 levels. Thus to end the day, the rupee closed with a gain of 12 paise at 66.65/USD against previous close of 66.77/USD.
Trading range for the spot USD/INR pair will be 66.50 to 67/USD.
In forward market, premium for dollar recovered on fresh buying pressure from corporate.
The benchmark 6-month premium for November recovered to 199-201 paise from 197-199 paise yesterday and far-forward May 2017 contract also moved up to 391-393 paise from 386-388 paise.
Photograph: Rupak De Choudhury/Reuters
