The dollar stayed in consolidation mode after its rally to two-month highs ran out of steam with bulls looking for fresh guidance from the head of the U.S. central bank.
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“Exporters were seen selling dollars and that’s supporting the currency, ” said Ankur Jhaveri, co-head of currency and rates at Edelweiss Financial Services Ltd.in Mumbai.
The rupee opened higher on increased selling of the United States currency by exporters and banks amid a higher opening in the domestic equity market.
The domestic unit rebounded from its 2-1/2 month low with an impressive 42-paise gain – its sharpest single-day jump in over two months. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 67.40 and for Euro stood at 75.54 on May 20, 2016. The currency touched a high and low of 67.35 and 67.2575 respectively. On Tuesday (May 24), rupee continued to fell for the ninth straight day.
In cross-currency trades, the rupee retreated sharply against the pound sterling to finish at 98.98 from 97.71 yesterday. On the other hand, Federal Reserve interest rate hike worries and improvement in dollar index put rupee under pressure.
Meanwhile, foreign institutional investors (FIIs) turned net buyers after the recent selling spree and bought equities worth Rs 495.08 crore in Wednesday’s trading session, as per provisional data released by the stock exchanges.
The benchmark six-month premium for October moved down to 179-181 paise from 180-182 paise and far forward April 2017 contract also softened to 377-379 paise compared to 378-380 paise earlier.
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