Rupee Climbs To One-Week High As Crude Dives
Rupee surges against the U.S. dollar buoyed by a steep fall in crude prices and a strong rally in equity markets.
The rupee today surged by 20 paise to end at a one-week high of 68.57 against the U.S. dollar buoyed by a steep fall in crude prices and a strong rally in equity markets.
Forex market witnessed a revival in sentiment after crude prices plunged the most in two years on supply glut worries after Libya said its four oil export terminals were reopening, ending a standoff that had closed most of its oil output.
The benchmark Brent crashed over 7 percent yesterday before regaining some lost ground in early Asian trade at $74.80 a barrel.
The Indian currency gained further ground even as the U.S. dollar was strong in global markets amid trade war concerns between the U.S. and China. It touched a high of 68.50 in early trade. The home currency also made a strong comeback against the British pound, euro and Japanese yen. A strong rally in equities buoyed by optimism about a robust corporate earnings season, besides a progressing monsoon, also lent support to the rupee.
The S&P BSE Sensex closed at a fresh lifetime high of 36,548.41, while Nifty 50 reclaimed the significant 11,000-mark.
Foreign investors remained net sellers in the stock market as they sold shares worth Rs 742 crore on net basis, according to the provisional data.
The rupee opened higher at 68.67 against last close of 68.77 at the Interbank Foreign Exchange (forex) market on sustained selling of the greenback by banks and exporters. It later marched ahead to hit a session high of 68.50 in mid-afternoon deals before ending at 68.57, revealing a healthy gain of 20 paise, or 0.29 percent.
The domestic bond market also rallied for the second day and the 10-year benchmark yield tumbled 9 basis points to 7.78 percent from 7.87.
Globally, the U.S. dollar rose to a six-month high against the Japanese yen after the U.S. inflation data bolstered the case for more Federal Reserve rate hikes this year. The dollar index, which measures the greenback's value against basket of six major currencies, was down at 94.50.
In the cross currency trade, the rupee bounced back against the pound sterling to finish at 90.44 per pound from 91.11 and recovered against the euro to end at 79.88 compared to 80.56 yesterday.
The pound sterling remained bearish ahead of Brexit white paper, which triggered resignations of high profile U.K. ministers, including David Davis and Boris Johnson, is set to be published later in the day.
The local unit also strengthened against the Japanese yen to settle at 60.92 per 100 yens from 61.83 earlier.
In forward market today, premium for dollar declined owing to heavy receiving from exporters.
The benchmark six-month forward premium payable in November fell sharply to 111-113 paise from 115-117 paise and the far-forward May 2019 contract also slumped to 257.75-259.75 paise from 264-266 paise.