On sliding greenback: Rupee hits 2-1/2 year high

Heavy dollar unwinding by speculative traders support the domestic currency.

By: ENS Economic Bureau | Mumbai | Published: January 3, 2018 1:11:07 am
sensex, rupee, usd, US dollar, bse, nifty, financial markets, business news, market today, indian express news, business news The currency opened at 63.69, touched a high of 63.44 and ended at 63.48 a dollar — a level last seen on July 17, 2015.

The rupee on Tuesday rallied for the fourth session in a row to close at an over 29-month high of 63.48 against the US dollar amid dollar sales by banks and exporters and the weak US currency abroad.

The currency opened at 63.69, touched a high of 63.44 and ended at 63.48 a dollar — a level last seen on July 17, 2015. It gained 20 paise from its Monday’s close of 63.68. “The rupee has been strengthening primarily on the back of weakness in the dollar against its major crosses,” said a dealer.

Asian currencies were trading higher after the dollar Index eased by 0.4 per cent to the lowest in 14 weeks. The dollar index was trading at 91.859, down 0.41 per cent, from its previous close of 92.24. “The risk of fiscal slippages in the run-up to the 2019 elections and rising non-oil non-gold imports (up 20 per cent year-on-year average growth registered in the past seven months) needs to be monitored closely. India continues to attract capital flows (both FDI and non-FDI flows) and forex reserve accretion continues. The USD remains relatively weak against other major currencies, despite expectations for the US Fed to continue its balance sheet wind-down alongside two rate hikes in 2018 and three more in 2019,” said a UBS report.

The rupee gained 6.35 per cent in 2017 even as foreign investors put over Rs 200,000 crore in Indian equity and debt.

Meanwhile, the Sensex ended flat as caution prevailed ahead of corporate results amid soaring global crude prices and a subdued trend in European markets. After a higher opening at 33,913.55, the Sensex advanced to hit the day’s high of 33,964.14. But profit-booking towards the middle of the session erased gains completely dragging the index to a low of 33,703.37. The 30-share barometer closed at 33,812.26, down by just 0.49 points. The index had lost 244.08 points in the first trading session of 2017 on Monday.

The NSE Nifty, however, ended a shade higher by 6.65 points or 0.06 per cent at 10,442.20 after moving between 10,495.20 and 10,404.65. The upcoming corporate result season, beginning later this week and the approaching Union Budget kept investors on their toes, who indulged in selling activity, brokers said.

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