Rupee snaps 3-day fall, gains eight paise to 60.13 vs dollar

Rupee resumed strong at 60.00 to a dollar compared with the previous close of 60.21 and gained to as much as 59.91 as local stocks climbed

The rupee ended three days of losses after a volatile session to close at 60.13 against the dollar following firm local equities and fresh currency sales by exporters.

Early gains were erased after the RBI said it didn't have any target level for the rupee. Rise in the dollar overseas also capped the rupee surge, a forex dealer said.

At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed strong at 60.00 to a dollar compared with the previous close of 60.21 and gained to as much as 59.91 as local stocks climbed.

However, RBI Governor D Subbarao's comment in Chennai that the central bank doesn't have an 'an exchange rate target' dented sentiments. Continued dollar demand from importers and some banks also saw the rupee dropping to a low of 60.38 in late afternoon deals.

The currency later rebounded on fag-end dollar selling by exporters to settle at 60.13, ekeing out a gain of eight paise, or 0.13%. The rupee had plunged 82 paise, or 1.38%, in the past three days.

The benchmark S&P BSE Sensex today added 233 points, or 1.22%. FIIs pumped Rs 164.56 crore in equities today, according to provisional data with stock exchanges.

'Yesterday's mixed economic reports from the US and high expectations from the Hindustan Unilever buyback offer contributed to the volatility in rupee today,' said Abhishek Goenka, Founder & CEO of India Forex Advisors. 'The RBI governor's comments further put pressure on the rupee. His comments suggested that the central bank is unlikely to defend any particular level, which dented sentiment.'

The dollar index was up by 0.12% against a basket of six major global rivals following a flare-up in the euro-zone's financial crisis as the European Central Bank prepared to announce its decision on monetary policy today.

'Investors are waiting for ECB's monthly policy meeting later today and June US non-farm payrolls data on Friday, which will help markets to find its way,' said Pramit Brahmbhatt, CEO, Alpari Financial Services.