Rupee jumps 14 paise to 65.14 against dollar ahead of Fed minutes

The rupee continued its recovery trend for a third day on Wednesday ending higher by 14 paise at 65.14 against the US currency after steady dollar unwinding by exporters and corporates.

Currency traders seemingly reduced their long dollar positions ahead of the much-awaited release of US Fed meeting minutes later in the day, a forex dealer said. There have been wide speculations about a US interest rate hike in December.

On the domestic front, the release of IIP for August and inflation for September is slated for tomorrow.

The home currency has now appreciated by 24 paise in the recent leg of rally despite heavy capital outflows.

A weak dollar in overseas markets also bolstered the domestic currency, a forex dealer said. The dollar extended its decline on the back of lower Treasury yields.

The rupee opened higher at 65.22 compared to last close of 65.28 at the Interbank Foreign Exchange (Forex) market largely driven by adequate dollar supply.

It strengthened further to hit an intra-day high of 65.1250 before finishing the day at 65.14, showing a smart gain of 14 paise, or 0.21 per cent.

It had briefly touched a low of 65.3150 during the trade.

The RBI, meanwhile, fixed the reference rate for the dollar at 65.2691 and for the euro at 77.1677.

The dollar index, which measures the greenback's value against a basket of six major currencies, was trading sharply lower at 92.94 in early trade.

In cross-currency trades, the rupee gained further ground against the Pound sterling to settle at 85.91 from 86.07 per pound and also recovered against the Japanese yen to finish at 58.02 per 100 yens from 58.05 earlier.

The local unit, however, remained under pressure against the Euro to settle at 77.03 from 76.89 yesterday. The euro was trading strong in global markets after the political risk of the Catalonian independence settled slightly.

In forwarding market today, the premium for dollar weakened further due to sustained receiving from exporters.

The benchmark six-month premium payable in March moved down to 127.50-129.50 paise from 129-131 paise and the far forward September 2018 contract also slipped to 265.50-267.50 paise from 267-269 paise previously.

Crude prices edged higher on expectations that markets are gradually tightening after years of oversupply. US West Texas Intermediate (WTI) crude futures were trading up 0.3 per cent at $51.06 per barrel.

Brent crude futures gained 0.1 per cent at $56.69.