Indian Rupee: Recovers On Fresh Dollar Sales

The Indian rupee recovered against the dollar in early trades on Friday, 11 May 2018 on fresh selling of the US currency by exporters and banks amidst higher opening in the domestic equity market. Weakness in the dollar against other currencies overseas after tepid inflation data also supported the rupee.

The domestic currency was seen at Rs 67.1450 against the dollar at commencement and showed some strength to quote 21 paise higher at 67.11 against the dollar in early trade today. However, the local unit eased from intraday highs and was last seen quoting at 67.1825 in the spot currency market. Yesterday, the rupee had lost 5 paise to end at a fresh 15-month low of 67.32 against the American currency on steady dollar demand from banks and importers.

A higher opening in the domestic equity market further influenced the rupee uptrend. Domestic benchmark indices were trading higher in early trade, tracking positive leads from Asian markets and overnight gains on the Wall Street. At 9:20 IST, the barometer index, the S&P BSE Sensex, was up 129.75 points or 0.37% at 35,376.02. The Nifty 50 index was up 40.40 points or 0.38% at 10,756.95.

Overseas, Asian shares were trading higher, tracking gains seen on Wall Street overnight. US stocks jumped on Thursday, with equities advancing in a broad rally that gave the Dow Jones Industrial Average its longest winning streak since February. Gains were supported by the latest economic data, which suggested the economy was healthy, but not growing so quickly that it was at risk of overheating.

Meanwhile, the dollar retreated from this years high after the U.S. released slower-than-expected CPI data, but rose slightly against the other major currencies on Friday in Asia as sentiment picked up. The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 92.59, up 0.01%. The greenback reached this years new high on Wednesday at 93.22, then continued to slip back on Friday to trade below the 93 level. Its uptrend since mid-April is still intact, however.