Rupee continued its aggressive surge for 3rd straight week

Mumbai: The Indian rupee continued its aggressive appreciation for the third-straight week and ended at a fresh one-month high of 63.78 against the dollar as the beleaguered US currency continued its incessant free-fall worldwide amid global turmoil.

This was the best close for the domestic currency seen since August 8, when it had settled at 63.63 per dollar.

Continued optimism of fund inflows and export proceeds against the backdrop of improving macro-economic environment continued to give the rupee strong underlying support.

A massive unwinding of dollar long positions by exporters and corporates predominantly lifted the rupee sentiment against the back drop of extremely bearish dollar overseas undertone.

Breaching the psychologically significant 64-mark on Wednesday believed to have triggered stop-losses and panic unwinding as the sharp appreciation of the rupee has caught exporters on the wrong foot, a forex dealer said. Most emerging market currencies too found comfort as dollar's sell-off accelerated in Asia.

In the meantime, country's forex reserves surged by a massive USD 3.572 billion to touch a record high of USD 398.122 billion for the week ended September 1, on account of rise in foreign currency assets, RBI data showed.

However, FIIs and funds remained net sellers and sold a net amount of USD 415.34 million amid sluggish domestic equities. At the Interbank Foreign Exchange market (forex), the local currency opened firmly higher 63.94 as compared to 64.02 last weekend.

But, quickly reversed the uptrend and retreated sharply to hit a low of 64.26 during the mid-week downtrend before staging a spectacular rebound towards the fag-end. Steering its spectacular recovery momentum, the home currency finally settled at the highest level of 63.78, showing a solid gain of 24 paise, or 0.37 per cent. For a third weekly rally, the rupee has appreciated by a whopping 37 paise.

The RBI, meanwhile, fixed the reference rate for the dollar at 63.8664 and for the euro at 77.0357. On the global front, the greenback plumbed its lowest level in 33 months, succumbing to pressure from a combination of market concerns ranging from hurricane damage and North Korea to the composition of the Federal Reserve and its policy direction.

The dollar index just skidded to new 2017 lows in early Thursday trading at 91.011 mark, bringing its losses for the year to nearly 11 per cent.