Forex update: Rupee closes higher, rises 0.56% in three days

The Indian rupee continued to firm up against the American currency for the third day on Wednesday, gaining another three paise to close at 61.40 on persistent selling pressure of dollars from banks and exporters amidst weakness of dollar in the global market.

The rupee resumed lower at 61.46 per dollar as against Tuesday's closing level of 61.43 per dollar at the Interbank Foreign Exchange (Forex) Market and dropped further to 61.5150 per dollar on spell of initial dollar demand from importers.

However, it recovered from initial losses and ended at 61.40, showing a gain of 3 paise or 0.05 per cent.

The rupee has gained by 35 paise or 0.56 per cent in the last three trading days.

It moved in a range of 61.34 per dollar and 61.5150 per dollar during the day

Crude oil prices fell further in the Asian trade on Wednesday on demand concerns after the International Monetary Fund (IMF) cut its the global economic growth forecasts.

In New York market, the US dollar fell to three-week low against its major rival in early trade, as dealers opted for safe-haven Japanese yen.

The dollar continued to dip lower on Tuesday against the yen Tuesday afternoon, reaching its lowest point in more than three weeks, in a move described as a correction following a strong run up.

Meanwhile, the Indian benchmark Sensex moved down by 25.18 points of 0.10 per cent to end at 26,246.79.

Mr Pramit Brahmbhatt, Veracity Group CEO said," Rupee opened weak taking cues from local equities which traded slightly negative. With expectation of interest rate hike in the US, the dollar anticipated for bullish run in coming days. Towards end rupee trimmed its early losses and close near Tuesday's close at 61.40, as today".

In forward market, premium ended lower on fresh receipts by exporters.

The benchmark six-month premium payable in March closed lower at 228-230 paise from the Tuesday's closing level of 234-236 paise while far-forward contracts maturing in September, 2015 also ended lower at 463-465 paise as against 473.5-475.5 paise.

The Reserve Bank of India fixed the reference rate for dollar at 61.4648 and for the euro at 77.6546.

The rupee moved up further against the pound to 98.66 from the previous close of 98.68, but declined to 77.68 per euro from 77.37 per euro.

It also fell to 56.70 per 100 yen from 56.60 on Tuesday.