Rupee settles 34 paise higher at 71.56 against US dollar; narrowing trade deficit, gains in equities boost sentiments
The Indian rupee on Monday recovered by 34 paise to close at 71.56 against the US dollar as forex market sentiments were driven by the country's narrowing trade deficit in November as also smart gains in domestic equities.
Mumbai: The Indian rupee on Monday recovered by 34 paise to close at 71.56 against the US dollar as forex market sentiments were driven by the country's narrowing trade deficit in November as also smart gains in domestic equities.
Besides, the American currency's weakness against its major rivals globally helped the rupee further its gains.
According to commerce ministry data, India's trade deficit came down to $16.67 billion in November 2018 from $17.13 billion in October this year.
At the Interbank Foreign Exchange, the rupee opened higher at 71.84 a dollar and soon gathered momentum to touch a high of 71.51.
The domestic unit, however, pared some gains and settled the day up by 34 paise at 71.56 a dollar.
On Friday, the rupee had dropped by 22 paise to close at 71.90 against the US dollar.
Forex dealers attributed the rupee gains to the greenback's weakness against some currencies overseas and improving macro picture in form of narrowing trade deficit numbers.
Heavy buying in domestic equities also helped trading sentiments in the forex market, they added.
Equity benchmark Sensex continued its winning streak for a fifth straight session Monday. The 30-share BSE Sensex closed at 36,270, showing a rise of 0.85 percent or 307 points. Similarly, the broader NSE Nifty ended at 10,888, a gain of 0.77 percent or 83 points.
Brent crude, the international benchmark, was trading at $60.89 per barrel on Monday, higher by 1.01 percent.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.6730 and for rupee/euro at 81.0717. The reference rate for rupee/British pound was fixed at 90.1981 and for rupee/100 Japanese yen at 63.17.
He also questioned the government for 'backsliding' on the fiscal deficit target for the current year
At the interbank foreign exchange, the rupee opened at 78.26 against the American dollar, then inched higher to quote at 78.23, registering a rise of 9 paise from the previous close
The Federal Reserve interest hike of 75 bps could trigger a churn in equity markets, cool off investor enthusiasm and further weaken the Indian currency against the Greenback