Rupee rises for the 2nd straight day on dollar sale

The rupee extended gains for the second consecutive day by surging another 35 paise to 63.65 on persistent selling of dollars by banks and exporters due to weakness of dollar in the overseas market.

Banks and exporters preferred to reduce their dollar position in view of lower dollar in the overseas market. The greenback continued to weaken today in the global market, sending a benchmark dollar index to the lowest level since late January as recent sluggish US data prompt investors to rethink the timing of the first Federal Reserve rate hike.

The dollar index was trading down 0.38 per cent against its major global rivals.

In the New York market, the US dollar weakened against most of its major rivals on Wednesday after a slate of weaker-than-expected economic data.

The rupee opened higher at 63.97 per dollar against the last closing level of 64.00 at the Interbank Foreign Exchange (Forex) Market and hovered in a range of 63.61 and 64.04 before concluding the day at 63.65, showing a gain of 35 paise or 0.55 per cent.

The rupee has gained by 52 paise of 0.81 per cent in the two days.

In an irregular trade, the benchmark Sensex on Thursday trimmed major part of early losses on hopes of rates cut by the central bank following fall in inflation based on CPI and WPI, still showing a small loss of 45 points to close at 27,206.06.

Mr. Pramit Brahmbhatt, Veracity Group CEO said ,"Rupee traded strong and appreciated by half quarter percent during the day to close at 63.65. Rupee started the day on a positive note as weak dollar index supported the Rupee movement though weak local market capped the Rupee gain".

The trading range for the Spot USD/INR pair is expected to be within 63.20 to 64.00.

In the forward market, the premium declined on fresh receivings by exporters.

The benchmark six-month premium payable in October fell to 212-214 paise from 215.6-218.5 paise yesterday and forward contracts maturing in April 2016 also moved down to 435-437 from 437.5-439.5 paise.

The Reserve Bank of India fixed the reference rate for dollar at 63.8380 and for the euro at 72.8775.

The rupee moved down against the pound sterling to 100.58 from 100.20 previously and also declined against the euro to 72.66 from 71.89

However, it firmed against the Japanese currency to 53.38 per 100 yen from 53.47.