Dollar selling props up rupee

In a lacklustre trade throughout the week, the Indian rupee appreciated for the second week in a row by 36 paise to close at 61.54 against the greenback following continued dollar selling by exporters amid firm local stocks.

Sustained capital inflows and better dollar overseas also aided the rupee rise.At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed strong at 61.52 a dollar from previous weekend’s close of 61.90 due to smart rise in local stocks.
 The rupee was also supported by weakness in the US dollar overseas after disappointing US jobs data announced last weekend eased concerns about the Federal Reserve’s tapering of the stimulus programme, a forex dealer said.

Later, it moved in a range between 61.3175 -more than one month intra-day high- and 61.7150. Last three days of the week, the rupee closed with small changes either side on alternate bouts of demand and supply. It, finally, closed at 61.54, showing a rise of 36 paise or 0.58 per cent. Last week, it has gained 26 paise or 0.42 per cent.

FIIs injected $244.11 million on first four days of the week, as per Sebi data.Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, “Not much action was seen in the currency market. Rupee traded range bound while local equities closed higher. Foreign fund inflows in the bond market helped Rupee to rise and on the other hand, dollar index traded strong as a run of mixed US economic data left the market uncertain about its future direction which forced rupee to close near its previous close. The trading range for the spot rupee is expected to be within 61.00 to 62.00.” 

“The dollar strengthened against majority of its counterparts as improvement in retail sales, PPI and ISM manufacturing once again fuelled hopes that US economic recovery is sustainable, signalling additional tapering of monthly monetary asset purchases in the upcoming FOMC meeting, scheduled for January 28-29. Euro region currency witnessed negative news this week as the strongest nation in the region, Germany, witnessed a downtick in their GDP numbers on Wednesday. The Euro region currency weakened after the release,” he added.

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