Rupee Closes At 1-Week High Against Dollar

The rupee on Thursday surged by 20 paise to end at a one-week high of 68.57 against the US dollar buoyed by a steep fall in crude prices and a strong rally in equity markets. Forex market witnessed a revival in sentiment after crude prices plunged the most in two years on supply glut worries after Libya said its four oil export terminals were reopening, ending a standoff that had closed most of its oil output. The benchmark Brent crashed over 7 per cent yesterday before regaining some lost ground in early Asian trade at $74.80 a barrel. The Indian currency gained further ground even as the US dollar was strong in global markets amid trade war concerns between the US and China. It touched a high of 68.50 in early trade.    

A strong rally in equities buoyed by optimism about robust corporate earnings season also a progressing monsoon also lent support to the rupee. The BSE- Sensex closed at a fresh lifetime high of 36,548.41, while Nifty reclaimed the significant 11,000-mark.    

Foreign investors remained net sellers in the stock markets as they sold shares worth Rs 742 crore on net basis, according to the provisional data. The rupee opened higher at 68.67 against last close of 68.77 at the Interbank Foreign Exchange (forex) market on sustained selling of the greenback by banks and exporters.    

It later marched ahead to hit a session high of 68.50 in mid-afternoon deals before ending at 68.57, revealing a healthy gain of 20 paise, or 0.29 per cent. The domestic bond market also rallied for the second day and the 10-year benchmark yield tumbled 9 bps to 7.78 per cent from 7.87.    

Globally, the US dollar rose to a six-month high against the Japanese yen after the US inflation data bolstered the case for more Federal Reserve rate hikes this year. The dollar index, which measures the greenback's value against basket of six major currencies, was down at 94.50.