Rupee rises 12 paise to 1-month high of 70.92 against US dollar

Mumbai: The rupee rose by 12 paise to close at a more than one-month high of 70.92 against the US dollar on Tuesday amid softening crude oil prices and weakening of the greenback vis-a-vis major global currencies.

Forex traders said the Indian rupee gained ground on the back of stable crude oil prices and a weaker dollar index. However, muted domestic equity markets weighed on the local unit.

At the interbank foreign exchange market, the rupee opened at 70.98 against the US dollar.

During the day, the domestic unit fluctuated between a high of 70.85 and a low of 71.04 and finally ended the day at 70.92 against the US dollar, the highest closing level since November 5 when the unit settled at 70.69.

On Monday, the rupee had settled at 71.04 against the American currency.

"Rupee continued to extend gains despite fall in domestic equities but primarily on back of weakness in the dollar against its major crosses," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services Private Ltd.

Somaiyaa, further said that focus will now be on inflation and industrial production number and weaker-than-expected data could curb the gains for the currency.

"We expect the USDINR (Spot) pair to find support close to 70.80 levels and on the higher side resistance is at 71.40 level," he said.

Forex traders said easing crude oil prices and weaknesss of the US dollar vis-a-vis other currencies overseas supported the rupee.

"Asian currencies are mixed as investors appear reluctant to place bets ahead of the Dec. 15 deadline for the U.S. to place more tariffs on China. ICE dollar index is placed near a one-month low as traders await a series of risk events this week led by a Federal Reserve policy meeting Wednesday," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.13 per cent to 97.51.

Meanwhile, foreign investors sold equities worth Rs 366.79 crore on Tuesday, according to provisional exchange data.

Benchmark indices spiralled lower dragged by widespread selling in bank, energy and IT stocks, as investors booked profit at higher levels amid lacklustre macro and global cues.

The 30-share BSE Sensex, after a positive opening, lost momentum throughout the session. It finally closed 247.55 points or 0.61 per cent lower at 40,239.88.

The 10-year government bond yield was at 6.71 per cent on Tuesday.

Brent crude, the global oil benchmark, fell 0.51 per cent to USD 63.92 per barrel in futures trade.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.1620 and for rupee/euro at 78.7189. The reference rate for rupee/British pound was fixed at 93.7455 and for rupee/100 Japanese yen at 65.54.