Rupee spurts 35 paise to nearly 2-week high on easing crude prices

The rupee climbed 35 paise to end at nearly two-week high of 73.48 per dollar on Tuesday amid softening crude oil prices and easing concerns over the trade deficit.

Traders said foreign fund inflows and greenback weakening against other currencies were the other factors that provided support to the home unit.

At the Interbank Foreign Exchange (Forex), the rupee opened on a firm note at 73.79 from Monday’s close of 73.83. During the day the domestic currency gained further ground to hit a high of 73.47 against the US dollar, driven by selling of the greenback by exporters.

The domestic unit settled the day up by 35 paise or 0.47 per cent at 73.48 to the dollar, the highest closing level since October 3.

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The rupee had lost 26 paise to close at 73.83 Monday.

Forex dealers said bullish trend in the equity market as well as easing crude oil prices supported the rupee’s upward movement.

“Alongside positive news on crude, the ten-year bonds rallied as yields closed lower. The currency rallied on the lower than expected trade deficit data,” said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.

The trade deficit dropped to a five-month low of $13.98 billion in September even as exports declined by more than 2 per cent. A higher trade deficit inflates the current account deficit which has a bearing on the local currency due to fund outflows.

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The benchmark Brent oil was trading 0.88 per cent lower at $80.07 a barrel on Tuesday due to easing tensions over disappearance of a Saudi journalist which calmed the oil market.

US President Donald Trump Monday had said that “rough killers” could be behind the disappearance of journalist Jamal Khashoggi as opposed to his earlier threatening stance. 

Stock markets also welcomed a retreat in oil prices and gains in the rupee with the benchmark 30-share Sensex rising by 297.38 points or 0.85 per cent to close at 35,162.48.

The NSE Nifty after regaining the 10,600-mark hit a high of 10,604.90 on the back of widespread gains, and finally concluded 72.25 points or 0.69 per cent higher at 10,584.75.

Foreign investors bought shares worth Rs 67.86 crore Monday, while domestic institutional investors purchased stocks worth Rs 294.78 crore, provisional data showed.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the dollar at 73.9041 per dollar.

The reference rate for euro was fixed at 85.5750 and for the British pound at 97.3327. The reference rate for 100 Japanese yen was 65.95.