Rupee rises 6 paise to close at over 2-week high

The rupee today gained 6 paise to close at more than two-week high of 64.83 against the US currency as the dollar weakened against the major currencies following US inflation data and the 'Rexit'.

The rupee traded almost flat in most part of the day but fag-end dollar selling helped the local currency extend gains for the third day in a row.

The dollar fell against the euro and the British pound after a lower inflation data and the US President Donald Trump sacked Secretary of State Rex Tillerson, a development which was termed as 'Rexit'. The dollar index too fell by 0.1 per cent.

The domestic currency had opened 2 paise higher at 64.87 against the US dollar today at the Interbank Foreign Exchange on selling of the greenback by exporters and banks.

It moved in a range of 65.06 to 64.83 in day trade amid losses in the stock markets. It finally settled up by 6 paise or 0.09 per cent at 64.83 per dollar, the highest closing level since February 27.

"Rupee was trading mostly flat against the US Dollar with  RBI's decision to ban banks from issuing LoUs, not prompting any major moves," Anand James, Chief Market Strategist at Geojit Financial Services said.

"US Dollar looks to be stabilizing after widening fiscal numbers, but response to retail sales data will hold the key for directional moves in US dollar, and help rupee shift away from the 65 mark," he added.

Inflation based on wholesale prices eased to a seven-month low of 2.48 per cent in February on cheaper food articles, including vegetables, official data showed.

Meanwhile, foreign investors withdrew around Rs 258 crore from stocks today, according to the provisional exchange data.

The BSE Sensex settled 21.04 points or 0.06 per cent lower at 33,835.74. During the day, the barometer swung almost 295 points.

The RBI fixed the reference rate of the rupee at  64.9875 against the US dollar and 80.5845 for the euro.

In the cross currency trade, the rupee closed lower at 90.59/61 per pound against last close of 90.13/15. It also fell against the euro to finish at 80.23/25 from 80.04/06 earlier. The Indian unit fell against the Japanese yen to 60.91/93 per 100 yen.

In the forward  market, the benchmark six-month forward premium payable in August moved to 121-123 paise against 122.50 -124.50 paise earlier. The fag-forward February 2019 contract were down at 239-241 paise against 241-243 paise previously.

Crude oil prices dropped with the Brent North Sea declining 19 cents to USD 64.45 per barrel Oil - West Texas Intermediate falling 9 cents at USD 60.62 per barrel.