Rupee soars to 3-mth high, up 30 paise on BJP's poll prospects
15 Dec 2017 4:59 PM GMT
Mumbai: Maintaining its upbeat momentum, the rupee today surged by 30 paise to hit a fresh 3-month high of 64.04 against the US dollar, with all exit polls on assembly elections suggesting the BJP retaining Gujarat and returning to power in Himachal Pradesh.
This is the highest closing for the home currency since September 13, when it had closed at 64.00. It was also the biggest single-day gain for the rupee in over three weeks.
Overall currency market sentiment turned extremely bullish after the exit poll outcomes predicted BJP's win in Gujarat for the sixth time and a clean sweep in Himachal Pradesh elections.
A smart rally in local equities also supported the rupee momentum.
It was further supported by unwinding of long-dollar positions by speculators and some foreign banks with the US dollar down on shaky outlook for the tax reform progress.
Big-picture economic indicators like improving current account deficit and abundant FII inflows largely weighed on the trading front, a forex dealer said. Brent crude, an international benchmark, is trading at $63.25 a barrel in early Asian trade.
Meanwhile, most emerging Asian currencies traded in narrow ranges amid relatively weak equity markets, though headed for positive weekly close.
At the Interbank Foreign Exchange (forex) market, the home currency resumed substantially higher at 64.20 compared to Thursday's close of 64.34.
It gained further ground to hit an intra-day high of 64.01 in mid-afternoon deals before ending at 64.04, showing a smart 30 paise jump, or 0.47 per cent.
For the week, the rupee has appreciated by a whopping 41 paise, stretching the rally to fifth-straight week.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.0958 and for the euro at 75.5241.
On the global front, the greenback remained moderately lower against other major currencies amid fresh concerns over US tax reform plans even as the Federal Reserve's most recent policy statement continued to weigh.
The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 93.56 in early trade.
In cross-currency trades, the rupee rebounded sharply against the pound sterling to close at 85.88 from 86.52 per pound and edged up against the Japanese yen to settle at 57.10 per 100 yens from 57.11 earlier.
It also recovered against the euro to end at 75.59 from 76.06 on Thursday.
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