Rupee holds grip ahead of key macro data, up 2 paise

The rupee edged up by 2 paise to end at 67.41 against the American currency on stray dollar selling by banks and exporters also supported by expectations of robust macroeconomic outcomes.

A positive trading sentiment around domestic equity markets further supported the home currency.

The rupee-dollar outright spot dealings largely remained quiet and range-bound due to lack of market-moving factors as traders adopted caution ahead of fourth quarter GDP and infrastructure sector data, which was released after market hours.

Meanwhile, government data showed that the Indian economy grew 7.7 per cent in the January-March quarter and 6.7 per cent in the 2017-18 fiscal. Infrastructure sector recorded 4.7 per cent growth in April as against 2.6 per cent a year ago.

Moreover, absence of month-end dollar demand from oil companies and bullion dealers also weighed on the currency front.

It witnessed either-way movements throughout the day on alternate bouts of buying and selling.

Excess volatility and movements of the dollar in global trade weighed on trade during the day, but the rupee managed to withstood the initial volatile momentum.

The Indian unit moved between a high of 67.32 and a low of 67.59.

On the energy front, crude prices retreated sharply after a brief overnight spike, weighed down by a surprise rise in US crude inventories and reports that OPEC and Russia are now considering lifting oil production by a million barrels per day in an effort to bring down oil prices.

Brent crude futures, an international benchmark, is trading up at USD 77.26 a barrel, in early Asian trade.

The rupee commenced flat at 67.42 from Wednesday's close of 67.43 at the inter-bank foreign exchange (forex) market.

It later strengthened to hit a fresh intra-day high of 67.32 in mid-morning deals before quickly retreating to a low of 67.59 a dollar.

After trading in tight-band, the local unit eventually managed to pull back towards the tail-end session and ended with a small gain of 2 paise at 67.41 against the US dollar.

The RBI, meanwhile, fixed the reference rate for the dollar at 67.4526 and for the euro at 78.7914.

The dollar index, which measures the greenback's value against a basket of six major currencies, is trading below the 94 mark at 93.85 ahead of the US non-farm payroll report on Friday.

In the cross-currency trade, the rupee fell back against the pound sterling to close at 89.92 per pound from 89.24 and dropped further against the euro to finish at 78.86 as compared to 78.43 yesterday.

The home unit, however, recovered against the Japanese yen to settle at 61.89 per 100 yens from 61.92 earlier.

Elsewhere, the euro is trading marginally up against the US dollar after the Eurozone inflation rose to a fresh 13-month high of 1.9 per cent in May, approaching the 2 per cent ECB inflation target even as the core inflation rose to 1.1 per cent.

The British pound, however, traded little changed largely impacted by a combination of softer macro releases, falling inflation, softening economic growth and signs of the Bank of England being in no hurry to raise the Bank rate.

In forward market today, premium for dollar edged higher owing to mild paying pressure from corporates.

The benchmark six-month forward premium payable in September inched up to 85.50-87.50 paise from 85.50-86.50 and the far-forward February 2019 contract advanced to 221-223 paise from 219.50-221 paise previously.