Mumbai: Snapping a two-day downtrend, the rupee on Tuesday rose by a staggering 48 paise to end at a one month high level of 54.14 against US dollar on robust FII inflows and hopes of lower CAD due to falling oil prices.

A sluggish dollar overseas also helped the rupee mark its best gain in 3 months on Tuesday as brent crude oil fell below USD 100 a barrel for the first time since July. The rupee commenced slightly weak at 54.65 a dollar from previous close of 54.62 at the Interbank Foreign Exchange (Forex) market and eased further to a low of 54.66.

Later, it bounced back on rally in stock markets to a high of 54.12 before closing at one-month high of 54.14, a net rise of 48 paise or 0.89 percent. Previously, rupee had settled at 54.01 on March 15, 2013.

Hopes of a 50-basis point rate cut by the RBI in its monetary policy meet on May 3 after sharp fall in headline as wella s retail inflation also boosted the rupee sentiment, a forex dealer said.

The dollar index, a gauge of six major global rivals, was down by 0.24 percent on worries over global growth and steep fall in gold prices.

Recent deceleration of gold and crude prices is also constructive for macros since these items account for about 40-45 percent of our total imports and a correction is likely to lend a favourable bias to Current Account Deficit (CAD).

Falling for the third straight session, gold prices on Tuesday slipped below the Rs 27,000 level as it crashed by a whopping Rs 1,160 to Rs 26,440 per 10 grams in the national capital.

The Indian benchmark S&P BSE Sensex on Tuesday spurted by 387.13 points or 2.11 per cent, registering its biggest gain in last seven months. FIIs pumped in nearly Rs 600 crore on Tuesday, as per provisional data with stock exchanges.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "Rupee ended strong by almost 0.9 percent taking cues from positive equity markets. Rupee is expected to trade within 54.00–54.50 levels. The dollar index, a measure against a basket of six major currencies, traded high at 82.51 from 82.318 late Monday."

"Recovery in the Euro and strong domestic equity markets lent support to the rupee. The rupee was also gaining as there was a selling pressure in the market," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
Meanwhile, the premium for the forward dollar moved down further on continued receipts by exporters. The benchmark six-month forward dollar premium payable in September eased to 171-172-1/2 paise from overnight close of 173-1/2-175 paise.

Far-forward contracts maturing in March also declined to 340-341 paise from 344-345-1/2 paise. The RBI fixed the reference rate for the US dollar at 54.6260 and for euro at 71.4150. The rupee improved further against the pound sterling to 82.89 from Monday's close of 83.75. It also recovered against the euro to 71.00 from 71.42. Rupee also rebounded against the Japanese yen to 55.35 per 100 yen from previous close of 55.91.


Latest News  from Business News Desk