Indian Rupee hits 3-month peak of 66.85 against US dollar

Mumbai: Building on yesterday's massive gains, the rupee on Thursday soared by 34 paise to end at a fresh 3-month high of 66.85 against the US dollar on frantic selling of the American currency by exporters and banks.

This is the highest closing since November 10 last year.

Robust dollar inflows into equities and easing Fed interest rate hike speculation largely kept forex market sentiment buoyant a day after the Reserve Bank of India (RBI) kept its policy rates on hold.

The domestic currency was further supported by unwinding of long-dollar positions by speculators and exporters despite firm overseas trend.

The rupee opened firmly higher at 67.04 as compared to overnight close of 67.19 at the Interbank Foreign Exchange (forex) market.

It soon breached the significant 66-barrier to hit an intra-day high of 66.84 on sustained dollar unwinding before concluding at 66.85, showing a solid gain of 34 paise, or 0.51 per cent.

In worldwide trade, the greenback was down a tad as lingering risk aversion pinned US bond yields near multi-week lows amid cooling Fed rate hike hopes.

The US dollar index was trading higher at 100.30 in late afternoon session.

The RBI fixed the reference rate for the dollar at 67.0123 and for the euro at 71.5423.

In cross-currency trade, the rupee softened further against the British pound to settle at 83.88 from 83.87.

However, the home unit strengthened further against the euro to close at 71.39 from 71.52 and also firmed up further against the Japanese Yen to end at 59.45 per 100 yens from 59.86 earlier.

Meanwhile, domestic equities regained some lost ground after two straight day selling on renewed buying interest in select frontline banking and metal counters.

Indian stocks hit four-month highs earlier this week.

Most Asian stock markets recovered smartly from early losses to end higher.

The benchmark Sensex rebounded by 39.78 points to end at 28,329.70, while Nifty added 9.35 points at 8,778.40.

Foreign portfolio investors once against turned net seller and offloaded shares worth a net Rs 127.69 crore yesterday.

In the forward market, premium for dollar continued to rule firm due to sustained paying pressure from corporates.

The benchmark six-month premium for July edged up to 155.5-156.5 paise from 154-156 paise and the far-forward January 2018 contract also rose to 305-306 paise from 301-303 paise on Wednesday.

Crude prices prices rebounded in early Asian trading after a dramatic overnight selloff despite a DOE report showing inventories rose by 13.8 million barrels last week.