WEEKLY MARKET REVIEW 6

Forex: The rupee decisively broken an uninterruptedForex: The rupee decisively broken an uninterruptedfour-week downslide channel and rallied to en...
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Forex: The rupee decisively broken an uninterruptedForex: The rupee decisively broken an uninterruptedfour-week downslide channel and rallied to end at a freshthree-week high of 64.93 against the beleaguered dollar onfresh bouts of dollar selling amid record-setting domesticequities.

Showing a stellar run throughout the trading week, thehome currency garnered a solid 45 paise against the greenback.

This is the highest closing for the local unit sinceSeptember 21.

The Indian rupee had lost a whopping 160 paise, or2.51 per cent in the last four-week carnage.

A combination of factors such as bullish macroeconomic situation and easing monetary policy environment amidfavouring global factors predominantly kept forex market moodbuoyant.

Extremely bearish dollar overseas undertone alongsidecontinued unwinding of long-dollar positions created byspeculative traders also played a key role.

Uncertainty over the pace of Fed tightening also addedsome relief on plate for local currency after minutes releasedfrom the latest FOMC policy meeting highlighted a dovish toneand pointed to sustained low inflation as a concern forpolicymakers.

The release of major domestic macro-economic data sentout a positive signal about bottoming out in the economy afterthe recent phase of downtrend to hit a three-year low in theJune quarter amid receding investor pessimism.

To enhance the government's reform credentials, theindustrial production grew at a nine-month high of 4.3 percent in August on account of robust performance of mining andpower sectors coupled with higher capital goods output, whileretail inflation came in at 3.28 per cent in September,unchanged from August.

The buoyancy reflects the country's attractivenessamong global investors due to strong fundamentals allyinggrowth concerns, a forex dealer commented.

Extremely bearish dollar overseas undertone alongsidecontinued unwinding of long-dollar positions created byspeculative traders also played a key role.

At the Interbank Foreign Exchange (forex) market, therupee opened a tad higher at 65.37 from last Friday's close of65.38 on stray dollar selling amid renewed geopolitical risks.

It later staged a spectacular rally as the currentsentiment and the bullish contrarian trading bias lifted thelocal unit to hit a high of 64.87 before ending at 64.93,showing a smart rise of 45 paise, or 0.69 per cent.

Foreign portfolio investors (FPIs) have embarked ontheir largest selling spree in local equity market in 2017 sofar and offloaded USD 41.53 mln this week.

Meanwhile, the RBI fixed the reference rate for theUSD at Rs 64.9301 and euro at Rs 76.8772 against precedingweek's level of Rs 65.2276 and Rs 76.2641, respectively.

(MORE) PTI EDMEDM.

This is unedited, unformatted feed from the Press Trust of India wire.

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