Rupee snaps 8-session losing streak, closes 29 paise higher

Rupee snaps 8-session losing streak, closes 29 paise higher

However, sustained capital outflows limited the rise in the rupee value. At the Interbank Foreign Exchange, the domestic currency opened lower at Rs 52.40/41 a dollar, as against its previous close of Rs 52.35/36 per dollar, amid initial weakness in local stocks and sustained dollar demand from importers.

However, sudden dollar-selling by exporters and some big corporates amid expectations of apex bank intervention in the foreign exchange market boosted the rupee sentiment.

The rupee later touched a high of 52.02 before concluding at 52.06/07, translating into a gain of 0.55 per cent. In the past eight trading sessions, the rupee has lost a whopping 223 paise, or 4.45 per cent.

Meanwhile, the BSE benchmark Sensex, which was down by 220 points in afternoon trade, made a start recovery on fag-end buying to settle higher by 158.52 points, or 1.01 per cent. Alpari Financial Services (India) CEO Pramit Brahmbhatt said, "The rupee traded strong for the major part of the day on dollar sales by exporters and corporates. The euro stayed near its seven-week-low against the dollar. Further improvement in the rupee may, however, be limited on fears that Europe's debt crisis may be worsening."

"The trading range for the rupee would be 51.70–52.40 tomorrow," he added.

The dollar index was down by nearly 0.2 per cent against a basket of major currencies, while New York crude oil was trading below USD 97 a barrel in the European market today.

FIIs pulled out USD 829.50 million from the equities market in the seven trading days from November 15. Meanwhile, food inflation fell sharply to 9.01 per cent for the week ended November 12 from 10.63 per cent in the previous week, even as prices of most agricultural items -- barring potatoes, onions and wheat -- continued to rise on an annual basis.

The rupee premium for the forward dollar also recovered smartly, in line with spot rupee demand, on fresh paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in April rose to 91-93 paise, as against Wednesday's level of 81-84 paise, and far-forward contracts maturing in October also concluded strong at 151-1/2-153-1/2 paise, in comparison to 136-139 paise previously.

The RBI has fixed the reference rate for the US dollar at Rs 52.25 and for the euro at Rs 69.8261. The rupee improved further to settle at Rs 80.88/90 against the pound sterling, compared to Rs 81.56/58 per pound yesterday, and also hardened to Rs 69.66/68 per euro from Rs 70.15/17 previously.

It also strengthened to Rs 67.58/60 per 100 Japanese yen from its previous close of Rs 67.85/87 per 100 yen.