Moving side-ways in line with local equities, the rupee on Wednesday recovered by 8 paise to close at 49.18/19 against the US currency on late dollar selling by exporters.
Weak dollar overseas ahead of the US Federal Reserve’s two-day policy meeting as well as latest developments on Greek’s fresh bail-out plan helped the rupee rebound.
At the Interbank Foreign Exchange (Forex) market, the local currency opened weak at 49.40/41 a dollar from overnight close of 49.26/27 and immediately logged a low of 49.45.
Dealers attributed initial fall to sluggish opening in local stocks due to negative global advices and also good dollar demand from banks and importers in view of higher dollar in New York yesterday.
The euro yesterday skidded to its lowest level against the dollar in almost a month at the New York market, as the Greece Prime Minister’s decision, to seek a referendum on the country’s latest bailout sparked fears that the European debt crisis could spiral out of control.
However, the rupee bounced back on recovery in stocks amid fresh dollar selling by exporters and touched a high of 49.15 before concluding at 49.18/19.
“The trading range for the USD/INR will be 49.00 to 49.50 tomorrow,” Alpari Financial Services (India) CEO Mr Pramit Brahmbhatt said.
After gyrating more than 275 points, the benchmark Sensex settled just down by nearly 16 points or 0.09 per cent.
The dollar index, a measure of six major currencies, was down by nearly 0.5 per cent while New York crude oil was trading near $93 a barrel in European markets today.
The rupee closed better at 49.18 against dollar. We can see further volatility in the markets ahead of the FOMC meeting and emergency talks among European leaders to discuss a fresh bail-out plan to stop the region’s debt crisis today,” India Forex Advisors CEO Mr Abhishek Goenka said.
The rupee premium for the forward dollar also recovered on fresh paying pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in April finished up at 112-1/2-114-1/2 paise from Tuesday’s level of 108/110 paise and far-forward contracts maturing in October also closed higher at 169-171 paise from 160-162 paise previously.
The RBI fixed the reference rate for the US dollar at Rs 49.2508 and for the euro at Rs 67.6445.
The rupee moved down further against the pound sterling to settle at Rs 78.62/64 from last close of Rs 78.38/40 while reacted downwards to Rs 67.78/80 per euro from Rs 67.40/51 yesterday. However, it held stable against the Japanese yen at its overnight closing level of Rs 63.01/03 per 100 yen.