The rupee closed marginally higher by two paise at 62.24 against the American currency on fresh selling of dollars by banks and exporters due to weakness of greenback in the international market.
Sustained foreign capital inflows into equity markets also boosted the rupee against dollar, a forex dealer said. The domestic currency resumed lower at 62.31 per dollar as against the last closing level of 62.26 at the Interbank Foreign Exchange (Forex) market and dropped further to 62.36 on some dollar demand from banks and importers.
However, the rupee recovered to 62.22 per dollar before concluding at 62.24 on fag-end selling of dollars by banks and exporters, showing a small gain of two paise or 0.03 per cent.
The domestic unit hovered in a range of 62.22 per dollar and 62.36 per dollar during the day. It had dropped by seven paise or 0.11 per cent yesterday. In the global market, the greenback has tumbled 3.7 per cent against the euro since touching a 12-year high last month amid speculation that the Federal Reserve will delay raising interest rates.
The dollar index, a gauge of six major global rivals, was down by 0.54 per cent on Wednesday. Oil prices fell more than a per cent in the Asian trade in the morning as data showed a larger-than-expected weekly build in the US stockpiles and Saudi Arabia reported record output in March. Meanwhile, the benchmark BSE Sensex ended higher by 191.16 points or 0.67 per cent at 28,707.75.
Pramit Brahmbhatt CEO of Veracity Group said: The rupee traded range-bound to slightly strong against the dollar and appreciated by almost two paise to close at 62.24 taking cues from local equity markets which ended on a positive note and also the continuous selling of dollar by exporters.
The trading range for the spot USD/INR pair is expected to be within 61.80 to 62.60. In the forward market, premia moved down further on sustained receiving by exporters.
The benchmark six-month premium payable in September moved down to 233-235 paise from 235.5-237.5 paise on Tuesday and forward contracts maturing in March 2016 also declined further to 456-458 paise from 458-460 previously. The Reserve Bank of India fixed the reference rate for dollar at 62.3295 and for the euro at 67.5963.
The rupee fell against the pound sterling to 92.93 from 92.80 on Tuesday, but recovered against the euro to 67.54 from 67.68. It declined marginally against the Japanese Yen to 51.94 per 100 yens from 51.91.