Rebounding from one-week low, the Indian rupee today rose by 9 paise to finish at 62.16 against the dollar, snapping its four-day falling trend, on the back of dollar selling by banks and exporters amid rise in stocks.
Moreover, dealers avoided taking any long dollar positions ahead of a long weekend, forex traders.
The rupee resumed lower at 62.32 a dollar at the Interbank foreign Exchange (Forex) market and weakened further to 62.34 due to initial dollar demand as well as volatile trend in stocks.
However, the domestic currency staged a recovery in late afternoon trade and closed at 62.16 per dollar, showing a smart gain of 9 paise, or 0.14 per cent.
The local unit had lost 33 paise to close at 62.25 against the dollar yesterday - its lowest level in one-week amid RBI Governor Raghuram Rajan’s comment that an “excessively strong rupee” is undesirable as it triggers disinflationary pressures.
Both the benchmark indices today staged a modest rebound after yesterday’s heavy fall with benchmark Sensex rising over 68 points and the Nifty moving up by 15 points.
Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 2,786.24 crore yesterday, as per provisional data.
Benchmark brent crude continued to trade above the USD 60 a barrel mark.
The Dollar index (DXY) extended its recent upside momentum against a basket of six major currencies following healthy growth indicators in the US economy and was up by 0.24 per cent to hit 96.21 - its highest level in 11-1/2 year.
“A strong dollar in the international market continues to limit any appreciation of the rupee. Dollar index is trading higher ahead of U.S. February jobs data tomorrow and following better-than-expected U.S. economic data yesterday. Euro fell against greenback before ECB meet today,” said Admisi Forex India Pvt Ltd, Director, Suresh Nair.