Weekly Review: Rupee continues strong recovery momentum for 2nd consecutive week

Mumbai: The rupee continued its strong recovery momentum for the second consecutive week against the US dollar and ended at a fresh one-month high of 64.32 on sustained selling of the American currency by exporters and banks.

This is the highest closing for the home currency since June 14, surging by a whopping 13 paise.

A spectacular performance on domestic equities further supported the rally.

Moreover, dollar's weakness against other Asian currencies also had an impact on the trading pattern in the forex market.

The week just ended was marked by multi-year highs for many Asian and emerging market currencies.

Abundant foreign fund inflows on the back of a ferocious record rally in bourses too backed up the momentum.

Maintained its strong edge against the beleaguered dollar, the local unit resumed firmly higher at 64.34 against last weekend close of 64.45 at the Interbank Foreign Exchange (forex) market.

It gained further ground to hit a near six-week high of 64.28 on Thursday driven by heavy dollar unwinding.

However, the home unit suffered a setback towards the fag-end trade following a sudden rebound the in greenback overseas and retreated sharply to touch a low of 64.4650 briefly on bouts of dollar demand from importers.

Though, it managed to bounce back sharply to end at 64.32, showing a good gain of 13 paise, or 0.20 percent.

The rupee has appreciated by 28 paise in last two weeks.

In the meantime, country's foreign exchange reserves rose by USD 2.681 billion to touch a new life-time high of USD 389.059 billion in the week to July 14, helped by increase in foreign currency assets (FCAs), RBI data showed.

In the previous week, the reserves had marginally declined by USD 161.9 million to USD 386.377 billion.

Foreign funds remained net buyers in Indian equities and bought shares worth USD 382.07 mln as per provisional data from stock exchanges.

The RBI, meanwhile fixed the reference rate for the USD at Rs 64.3185 and Euro at Rs 74.8796, respectively.

In worldwide trade, the greenback fell sharply to hit its lowest in more than a year against key world currencies on Friday as investors assessed comments from the ECB and also on renewed threat of Trump probe in response to comments by special counsel Robert Mueller regarding his investigations on the Russia-gate.

Spreculative traders were skeptical and showed some caution ahead of next week?s Federal Reserve monetary policy announcement and release of second-quarter GDP numbers.

The dollar index a measure of the US currency against a basket of six trade-weighted peers slipped below the 94.00 mark to end at 93.78 as against 94.90 previously.