Indian Rupee: Strengthens To Fresh One-Month High

The Indian rupee strengthened to a fresh one month high against the dollar in early trades on Monday, 04 June 2018, maintaining its uptrend for the fourth straight day, on increased selling of the greenback by exporters and banks. Investors were also eyeing the RBIs second bi-monthly monetary policy meeting of 2018-19, being held from June 4-6. A higher opening of the domestic equity market supported the rupee but the dollars strength against some currencies overseas after the release of an upbeat US jobs report capped the gains.

The domestic currency jumped 21 paise to a fresh one-month high of 66.85 against the dollar early today after commencing at 66.90. Rupee thereafter dipped to a low of 67.1075 so far during the day. In the spot currency market the Indian unit was last seen trading at 67.0675. On Friday, the rupee had gained 35 paise against the US currency to end at a near one-month high of 67.06 after a flurry of upbeat economic data bolstered confidence in the growth outlook.

Steep volatility was witnessed as key benchmarks were trading almost flat after displaying wild swings in morning trade. At 10:20 IST, the barometer index, the S&P BSE Sensex, was down 7.69 points or 0.02% at 35,219.57. The Nifty 50 index was down 6.65 points or 0.06% at 10,689.55.

Overseas, Asian stocks were trading higher, tracking gains seen on Wall Street on Friday, 1 June 2018. US stock-market indices jumped on Friday, following a solid jobs data for May, while shrugging off concerns over Italian politics and trade wars. The US labor market remains strong with 223,000 new jobs created in May, while the unemployment rate fell to an 18-year low of 3.8%. Wage growth was modest, with the yearly rate of pay rising to 2.7% from 2.6%. Receding fears about political upheaval in Italy also helped boost sentiment.

Meanwhile, the dollar opened the week sliding in morning trade in Asia Monday but holding on to most of its strength even as confidence in the U.S. economy was boosted by a strong jobs report and the likelihood of another interest rate increase by the U.S. Federal Reserve increased. The U.S. dollar index, which tracks the greenback against a basket of six major currencies, shed 0.15% to 94.02. The dollar index climbed to this years high of 94.93 last Wednesday then lost some steam, hovering near the 94 level.