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After its brief overnight pause, the rupee today again bounced back to end at a fresh 2-1/2 year high of 63.41, gaining by 12 paise against the US dollar on optimism over a brightening economic picture.
The domestic currency largely withstood the initial wobble post-FOMC minutes release and flaring crude prices globally.
The rupee tumbled to a low of 63.62 intra-day before staging a remarkable recovery towards the fag-end.
Expectations over healthy capital flows against the backdrop of growing optimism surrounding the economy added further bullishness to the ongoing rally.
Forex sentiment also got a boost after a monthly survey showed the Indian services sector returned to growth in December as new orders broadly stabilised.
A breathtaking rally in domestic equities too weighed on the forex trading front.
The domestic currency is witnessing burst of strength since the beginning of this year after a stellar 2017.
Earlier in the day, the rupee resumed lower at 63.59 as compared to overnight close of 63.53 at the Interbank Foreign Exchange (forex) market on bouts of dollar demand.
It weakened further to touch a low of 63.62 in mid- morning deals before rebounding sharply.
After hitting session’s high of 63.36, the local unit traded in a narrow range most part of the day as fresh dollar purchases by a large state-run bank, on behalf of the central bank acted as a tough resistance for the domestic currency before ending at 63.41, showing a good gain of 12 paise.
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