Rupee recovers 10 paise to 64.43 on robust exports data

Tags: Economy
The rupee today staged a mild recovery after yesterday's plunge and closed higher by 10 paise at 64.43 against the US dollar, taking cues from encouraging export numbers for May.

The domestic currency plunged by 23 paise to over 2- week low of 64.53 a dollar yesterday after the US Federal Reserve hiked rate by 25 bps as widely expected and maintained a hawkish tone going forward.

Heavy capital outflows alongside near-term consequences of the Fed rate hike largely kept forex market undertone shaky in early trade even today.

Though, the home currency made a strong comeback in late afternoon trade after the dollar gave up its strong gains against major global currencies, bolstering Asian currencies.

The rupee resumed sharply lower at 64.65 from overnight closing level of 64.53 at the Interbank Foreign Exchange (Forex) market due to strong dollar demand amid volatile currency market sentiment.

It drifted further to hit an intra-day low of 64.74 in mid-morning trade and largely traded range-bound within quiet trading conditions.

However, staging a rebound from the initial slide, the rupee touched a fresh high of 64.40 in fag-end trade before ending the day at 64.43, showing a gain of 10 paise, or 0.15 percent.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.5883 and for the euro at 72.0482.

Giving a boost to forex trade, the official data showed country's exports rising by 8.32 per cent to USD 24 billion in May, though the trade deficit too widened to touch nearly 30- month high of USD 13.84 billion, mainly due to increase in gold imports.

India's imports too increased by 33 per cent to USD 37.85 billion in May this year.

The domestic equities, despite a strong start, endured yet another sluggish session today on the back of heavy profit-taking in healthcare and technology counters after recent strong rally amid the lack of supportive cues.

After witnessing extreme volatility in late trade, key benchmark indices settled on a mixed note.

Foreign funds and investors sold shares worth a net Rs 645.35 crore yesterday, as per the provisional figures.

On the global front, the dollar slipped lower against other major currencies, pulling away from a recent two-week high as investors were preparing for a fresh batch of US data due later in the day after strong economic reports boosted US optimism.

The dollar index, which tracks the US currency against a basket of six major rivals, was down by 0.21 percent at 97.29.

Meanwhile, the Bank of Japan held monetary policy steady in its June board review.

In cross-currency trades, the rupee bounced back against the pound sterling to settle at 82.28 from 82.40 per pound and maintained strong momentum against the euro to finish higher at 71.99 from 72.00.

It also recouped against the Japanese Yen to close at 57.85 per 100 yens from 58.64 earlier.

In the forward market today, the premium for dollar displayed a lacklustre trend owing to lack of market moving factors.

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