Rupee at two-week high

Banks and exporters preferred to reduce their dollar position at the current stage in view of sustained capital inflows
Breaking a two-day fall, the rupee on Friday strengthened by 34 paise to end at two-week high of 54.01 against the dollar on robust capital inflows linked to Nalco offer-for-sale and heavy selling of the dollar by exporters.

The currency resumed at 54.15 a dollar from the last close of 54.35 and moved in a range of 53.97 and 54.21. This is the highest close after February 27 when it finished at 53.86. Banks and exporters preferred to reduce their dollar position at the current stage in view of sustained capital inflows coupled with weakness in dollar abroad, forex dealers said.

Though the Indian benchmark S&P BSE Sensex on Friday closed down by 142.88 points, FIIs pumped in Rs 1,018 crore in stocks. The offer for sale in Nalco was oversubscribed, guaranteeing at least Rs 515 crore to the government.

Globally, the dollar declined by 0.35 per cent against major rivals ahead of a slew of US economic data due out later in the global trading day.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, “The rupee spot had a gap up opening by 20 paise. It improved further taking cues from the dollar which traded weak against the major currencies mainly against the euro. The trading range for the dollar/rupee spot next week is expected to be within 53.70 to 54.30.”

Euro was trading up 0.1 per cent at $1.30, recovering from yesterday’s three-month low of $1.29. The bounce back in the euro also helped rupee to gain on Friday, said Abhishek Goenka, Founder & CEO, India Forex Advisors.