Continuing its winning streak for the third straight session, the rupee today strengthened by another 25 paise to an over two-and-a-half month high of 66.50 a dollar on persistent selling of the American currency by banks and exporters amid persistent foreign capital inflows.
A sharp recovery in the equity market also boosted the rupee value against the dollar, a forex dealer said. Foreign funds continued their buying spree as FPI/FII bought shares worth Rs 744.49 crore yesterday as per the provisional figures issued by stock exchanges.
The rupee resumed higher at 66.62 per dollar as against the last closing level of 66.75 at the Interbank Foreign Exchange market and dropped further to 66.49 before ending at 2-1/2-month high at 66.50, showing a gain of 25 paise or 0.37 per cent.
It has gained by 88 paise or 1.31 per cent in three days.
The rupee had last ended at 66.14 per dollar on Jan 1, 2016.
The domestic unit hovered in a range of 66.49 and 66.73 during the day.
Meanwhile, the dollar index was up 0.25 pct against a basket of six currencies in the late afternoon trade.
The dollar was weaker against the yen during the Asian session trade today, as the Federal Reserve's cautious stance on interest-rate increases puts downward pressure on the greenback.
Meanwhile, the benchmark BSE Sensex ended higher by 275.37 points or 1.12 per cent.
Pramit Brahmbhatt of Veracity Financial Services said,
"On the back of positive cues from domestic equity market, we saw the rupee appreciating against USD. In today's trading session, our benchmark Nifty index gained 64 points. Thus to end the day, the rupee closed by appreciating by 9 paise at 66.55/USD. Trading range for the spot USD/INR pair is expected to be within 66.20 to 66.80/USD.
The benchmark Sensex rose further to 189.61 points or 0.74 per cent today.
In forward market, premium for dollar fell on fresh receivings from exporters.
The benchmark six-month premium for September dropped to 194.5-196 paise from 198.5-200 paise previously and far forward March 2017 contract also tumbled to 391.75-392.50 paise from 397.5-398.5 paise previously.
Forex and Money markets will remain closed tomorrow, April 19, on account of "Mahavir Jayanti".
