The rupee gained during the day, but fell later on due to profit booking. However, dollar inflows helped the rupee recover its intra-day losses, though it closed slightly lower than the previous close. The rupee opened at 44.17 and touched a high of 44.10, at which level there was dollar buying. This pushed the rupee down to 44.28. It later ended at 44.21, against the previous close of 44.17/18. “Since March 15 when the rupee was at 45.30, it has gained by almost Re 1 against the dollar. So, there is likely to be a pause in the rally. But stock-related inflows will continue to be there, which will support the rupee. We are likely to see the rupee move closer to 44.80 levels,” said a dealer with a private bank.

In the overseas market, the dollar was quiet as the markets were waiting for the European Central Bank's meeting as it is expected to announce a rate hike for the Euro zone. This would be a return to the rate hike cycle after a two-year gap, said the dealer. “The ECB's policy is inflation-oriented. Its move to hike is based on the fact that in some Euro zone countries inflation is crossing the threshold level. It will hike rates even if growth is not picking up,” the dealer said. In the forward premia market the one year closed at 6.74 per cent (6.81 per cent).

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