Mumbai:- Rising for a second straight day, the rupee firmed up by 6 paise to close at 66.96 against the greenback due to sustained dollar selling from exporters amid weak overseas tone.
The local currency largely withstood the initial implied volatility in the face of month-end demand for the American currency from importers and staged a recovery towards the fag-end of the trade.
Robust foreign capital inflows into upbeat domestic equity markets on the back of better macro fundamentals also helped the rupee to gain, a forex dealer said.
However, the upmove was capped due to some caution ahead of the gross domestic product (GDP) data release for the June quarter and fiscal deficit data later, he added.
The home currency opened substantially weak at 67.10 from yesterday’s close of 67.02 at the Interbank Foreign Exchange (forex) market and advanced further to 67.11 due to fresh dollar demand.
But later it regained strength to hit an intra-day high of 66.95 before ending at 66.96, showing a modest rise of 6 paise, or 0.09 per cent.
It had gained 16 paise to close at 67.02 overnight – its highest level in a month.
In the meantime, US dollar turned a little softer against most of the major and emerging market currencies on some profit-taking ahead of Friday s US jobs report.
The dollar hit a one-month high against the yen today.
Hawkish comments from the US Fed chair Janet Yellen and other central bank speakers last Friday have lifted expectations that it will raise rates this year.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.115 per cent at 96.16 in early trade.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 390.63 crore yesterday, as per provisional data released by the stock exchanges.
The RBI fixed the reference rate for the dollar at 66.9813 and euro at 74.6239.
In cross-currency trades, the rupee weakened against the pound sterling to settle at 87.93 from 87.83 and also fell back against the Japanese yen to finish at 66.78 compared to 65.48 per 100 yens yesterday.
The home unit, however remained firm against the euro to close at 74.55 from 74.84 earlier. .
PTI
