At the Interbank Foreign Exchange (Forex) market, the rupee commenced higher at 56.04 a dollar from yesterday's close of 56.16. It immediately touched a low of 56.11.
After trading flat for a major portion of the day, the rupee gained strength on sustained dollar selling by exporters after European Central Bank's Draghi in London pledged to channelise efforts to protect the Eurozone from collapsing.
With the Euro rising 1 per cent against the dollar, the sentiment rubbed off on the rupee which closed at the day's high of 55.52, a rise of 1.14 per cent over yesterday.
Forex dealers said heavy dollar selling helped the rupee surge even though FIIs pulled out nearly Rs 1,200 crore from stocks with Sensex tanking by over 206 points today.
In the last four sessions of losses, rupee had tumbled by 104 paise or 1.89 per cent.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The ECB saved the day for Euro after Draghi pledged to support the currency and take what ever possible steps to save the currency."
The dollar index was down by a whopping 0.85 per cent against a basket of currencies after Draghi's comments.
The Royal Bank of Scotland in client survey today said the median expectation of the rupee is at 54 to a dollar by the end of December.
"The USD/INR pair is looking sideways. Crucial resistance for August month futures contract on MCX SX is at 56.40. Key support to watch is 56 level," said Amarsingh Deo, Head Commodities & Currencies, Aditya Birla Money. (MORE)
