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Rupee Ends at Week High on Upbeat GDP Data

The rupee weakened 13 paise to 68.51 against the US dollar in early trade on Thursday, snapping its two-session gaining spree at the Interbank Foreign Exchange on fresh demand for the American currency from banks and importers.

Press Trust Of India

Updated:December 1, 2016, 6:46 PM IST
Rupee Ends at Week High on Upbeat GDP Data
A picture depicting Indian currency notes.

Mumbai: Extending gains for the third straight day, the rupee on Thursday ended at one-week high of 68.34 against the resurgent dollar following robust macro-economic data even as crude prices jumped after the historic OPEC deal.

Stretching its strong recovery momentum for the third straight day, the home currency managed to sidestep the early volatility to end higher by 4 paise against previous close of 68.38 per dollar.

It had closed at fresh 2016 low of 68.76 on Monday.

Heavy unwinding of long dollar positions by banks and exporters alongside extended RBI intervention in the forex market predominantly helped the upmove, a forex dealer said.

The GDP growth accelerating to 7.3 per cent in the September quarter aided the sentiment though some nearterm concerns due to sharp rise in crude prices weighed on trade, the dealer said.

The oil producing countries' deal on production cut is pushing inflation expectations higher and could worsen the trade deficit over time against the backdrop of rising interest rates in the US amid a stronger dollar, he added.

Crude prices staged a spectacular rally and reclaimed the USD 50 a barrel mark after OPEC members agreed on curbing supply amid softening of prices.

At the Interbank Foreign Exchange (forex) market, the local unit resumed substantially lower at 68.48 and weakened further to hit an intra-day low of 68.51 on fresh demand for the American currency from banks and importers.

However, it staged a strong come back in mid afternoon deals to touch a high of 68.31 before ending at 68.34, showing a modest gain of 4 paise, or 0.06 per cent.

The home currency has appreciated by 42 paise in last three trading sessions.

In worldwide trade, the US dollar index was quoted higher at 101.21 in late afternoon.

Meanwhile, the RBI today fixed the reference rate for the dollar at 68.3734 and euro at 72.6262.

In cross-currency trades, the rupee retreated sharply against the pound sterling to settle at 86.33 from 85.06.

But, it maintained its edge against the Japanese yen to close at 59.81 as compared to 60.48 per 100 yens earlier and recovered against the euro to finish at 72.63 from 72.89 on Wednesday.

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