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Snapping a two-day downtrend, the rupee today 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 today as brent crude oil fell below $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 pct. 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% 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% 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 today 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 today spurted by 387.13 points or 2.11%, registering its biggest gain in last seven months. FIIs pumped in nearly Rs 600 crore today, as per provisional data with stock exchanges.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "Rupee ended strong by almost 0.9% 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.
