Indian Rupee: Strengthens Further On Fresh Dollar Sales

The Indian rupee extended gains against the dollar in early trades on Monday, 28 May 2018 on fresh selling of the greenback by exporters and banks. Dollars weakness against some other currencies overseas, on cooling global crude prices, and early gains in domestic equity markets also supported the rupee.

The domestic currency firmed up by nearly 47 paise to Rs 67.32 against the dollar in early trades today. The currency was last seen quoting at 67.4050 in the spot currency market. On Friday, the rupee had clocked its biggest single-session rally since March 14, 2017, surging by a whopping 56 paise to close at 67.78 against the US dollar.

Trading for the week began on an upbeat note as domestic stocks saw gap-up opening as crude oil extended a steep decline in the previous session. At 9:25 IST, the barometer index, the S&P BSE Sensex, was up 148.53 points or 0.43% at 35,073.40. The Nifty 50 index was up 57.60 points or 0.54% at 10,662.75. The Sensex regained the psychological 35,000 level in opening trade. In commodities, oil prices fell on Monday, extending a steep decline in the previous session, as the market eyed an increase in output from the worlds three top crude producers, Russia, the United States and Saudi Arabia. The slide in global crude oil prices will help India in containing inflation, current account and fiscal deficits. India imports about 80% of its crude oil requirement.

Overseas, most Asian stocks were trading higher on signs that the United States and North Korea are still working towards holding a summit next month. Profits earned by Chinese industrial firms in April reportedly rose at their fastest pace in six months, data from the National Bureau of Statistics (NBS) showed on Sunday, 27 May 2018 as factories benefited from higher prices and strong demand. US stocks ended mostly lower Friday, 25 May 2018 on lighter than normal volume as a plunge in crude-oil futures, sparked by reports that OPEC and major oil-producer Russia were considering increasing output, slammed shares of energy-related companies. Meanwhile, US markets will remain closed today, 28 May 2018 for Memorial Day. UK markets will remain closed today, 28 May 2018 for the spring bank holiday.

Meanwhile, the dollar index against a basket of six major currencies dipped 0.2 percent to 93.988 (DXY) after rising to 94.248 on Friday, its highest since Nov. 14. The greenback was up 0.05 percent at 109.400 yen after going as high as 109.830 on a slight ebb in risk aversion after U.S. President Donald Trump said on Sunday a U.S. team had arrived in North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un. The euro crawled off a 6-1/2-month low against the dollar on Monday, catching its breath after Italys president tried to allay investor worries about political unrest in the country, although the prospect of a near-term election capped gains.