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Rupee zooms 35 paise to 1-mth high on upbeat GDP data

twitter-logoPTI | June 1, 2018 | Updated 19:42 IST

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Mumbai, Jun 1 (PTI) The Indian rupee stormed ahead to end at a near one-month high of 67.06 against the US dollar today, surging by 35 paise after a flurry of upbeat economic data bolstered confidence in the growth outlook.

A broadly stronger Indian unit also rallied against British pound, euro and Japanese yen.

Beating the street estimates and signalling a turnaround, the nations economy expanded at 7.7 per cent in the January-March period against 7.2 per cent achieved in Q3 FY18, retaining the fastest growing major economy tag.

The economic expansion was significantly higher than Chinas 6.8 per cent in the January-March period.

In addition, infrastructure industries grew 4.7 per cent in April and also fiscal deficit for 2017-18 worked out to be 3.53 per cent of the GDP, broadly in line with the governments revised estimates.

However, the upbeat Q4 GDP data damped bets of rate cut from the Reserve Bank of India next week, a forex dealer commented.

The rupee has gained a healthy 80 paise in the latest bout of three-day rally.

Though, renewed fears about trade war after the US imposed new tariffs on imported steel and aluminum kept forex sentiment little shaky with the rupee depreciating in early trade.

The domestic unit touched a low of 67.45 before staging a strong rebound.

On the energy front, crude futures regained ground after early losses, but the US benchmark is set for a second consecutive week of declines as US oil output comes close to matching that of top producer Russia.

Brent crude futures, an international benchmark, is trading weak at USD 77.04 a barrel in early Asian trade.

At the inter-bank foreign exchange (forex) market, the local unit resumed virtually flat at 67.41 against the US dollar.

After briefly hitting a low of 67.45 in early morning deals, the rupee surprisingly sprung back to life following a heavy dollar unwinding exporters and banks.

It touched a fresh intra-day high of 67.00 towards the tail-end trade before ending at 67.06, showing a solid gain of 35 paise, or 0.52 per cent.

In a second weekly rally, the rupee has appreciated by a whopping 72 paise against the USD.

The RBI, meanwhile, fixed the reference rate for the dollar at 67.1840 and the euro at 78.4104.

However, the 10-year benchmark bond yields rose to 7.85 per cent from 7.83 per cent.

The dollar index, which measures the greenbacks value against a basket of six major currencies, was sharply higher at 64.17.

In the cross currency trade, the rupee recovered against the pound sterling to settle at 89.34 per pound from 89.92 and rebounded against the euro to end at 78.41 as compared to 78.86 earlier.

The home currency also strengthened against the Japanese yen to finish at 61.35 per 100 yens from 61.89 yesterday.

Elsewhere, the euro traded little changed against the greenback as the manufacturing activity in the Eurozone registered the slowest pace of expansion in last 15 months, copying the development in Germany, the Eurozones largest country, amid some caution ahead of the US employment report.

The headline manufacturing PMI fell to 55.5 in May, confirming the flash estimate published earlier in May, but it was down from 56.2 in April and off multi-year high from the turn of this year.

The British pound remained on a soft note despite positive manufacturing sector activity in the UK economy data which surprisingly rebounded in the month of May, the latest data revealed.

In forward market today, the benchmark six-month forward premium payable in October and the far-forward April 2019 contract finished at 112-114 paise and 251-253 paise, respectively. PTI EDM RHB MKJ MKJ

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