Rupee ends at 1-week high of 68.66 on dollar sell-off

A rally in domestic stock markets coupled with positive trade-related headlines provided an additional boost and largely weighed on the trading front despite rise in crude prices.

Forex sentiment witnessed a revival of enthusiasm as currency traders took comfort in the encouraging meeting outcome after US President Donald Trump obtained concessions from the European Union to avert a transatlantic trade war.

The dollar tumbled to a two-week low against a basket of major currencies on easing trade tensions between the US and the European Union.

On the energy front, crude prices rallied after Saudi Arabia suspended its oil shipments through a key Red Sea strait. The benchmark Brent for September settlement was trading higher at USD 74.32 a barrel in early Asian trade.

The rupee resumed higher at 68.71 from previous close of 68.79 at the Interbank Foreign Exchange (forex) market and extended the positive momentum through the Asian session to hit a session high of 68.62.

But, the Indian rupee came off the day’s high against the dollar in late afternoon trade on bouts of dollar demand and settled the day at 68.66, revealing a gain of 13 paise, or 0.19 per cent.

It has now strengthened by 28 paise against the USD in last two days.

The Financial Benchmarks India private limited (FBIL), meanwhile, fixed the reference rate for the dollar at 68.7017 and for the euro at 80.6045.

The bond market also rebounded a brief selling and the 10-year benchmark yield ended lower at 7.76 per cent.

The BSE Sensex today surpassed the 37,000-mark for the first time in history to touch an intra-day high of 37,061.62 as robust June quarter results spurred share purchases amid encouraging global cues.

In the cross-currency trade, the rupee also gained further ground against the pound sterling to end at 90.48 per pound from 90.51 and also edged up against the euro to finish at 80.42 as compared to 80.44 earlier.

The local currency, however drifted back against the Japanese yen to close at 61.96 per 100 yens from 61.94.

In forward market today, premium for dollar declined owing to mild receiving from exporters.

The benchmark six-month forward premium payable in November eased to 100-102 paise from 102-104 paise and the far-forward May 2019 contract moved down to 251-253 paise from 253-255 paise yesterday.