Rupee shines against weak dollar, Fed outcome looms

The rupee made up further ground against the American currency, appreciating 8 paise to end at 66.71 on continuous dollar unwinding from exporters and banks.
Subdued overseas sentiment ahead of the Federal Reserve's two-day monetary policy meet outcome largely influenced the forex market, with investors probably unwilling to take long commitments.
Better-than-expected manufacturing sector growth, which climbed to a 22-month high in October, driven by a sharp increase in new orders, also aided the rupee, regardless of the fall in equities.
Maintaining its strong edge against the US currency, the domestic unit opened on a firm footing at 66.72 against last Friday's closing value of 66.79 and immediately hit a fresh high of 66.67 in mid-morning deals.

Later, it moved in a narrow range with erratic and unsteady movements in the absence of any market-moving factor before ending at 66.71, a gain of 8 paise, or 0.12 per cent.
It moved in a range of 66.67 and 66.76 per dollar during the day. The home currency had gained 8 paise on Friday.

Forex market remained closed yesterday on account of Diwali Balipratipada.
Worldwide, the greenback traded with minor losses against most of the major and emerging market currencies ahead of the two-day FOMC meeting starting later today despite solid manufacturing data from the world's largest economy.
In a widely-expected move, the Bank of Japan (BOJ) maintained the 0.1 per cent interest it charges for a portion of excess reserves that financial institutions park with the central bank while it maintained its forecast that the economy is likely to expand moderately.

The dollar Index, which measures its broader strength against a basket of currencies, was down 0.21 per cent at 98.11 in the afternoon trade.
RBI today fixed the reference rate for the dollar at 66.71 and euro at 73.17.
In cross-currency trades, the rupee retreated sharply against the pound sterling to finish at 81.71 from 80.99 and fell back against the euro to settle at 73.37 compared with 72.94 previously.
The US dollar index was trading marginally up at 99.55
in late afternoon session.
The RBI fixed the reference rate for the dollar at 67.6458 and for the euro at 72.9154.

However, in cross-currency trade, the Indian unit retreated sharply against the British pound after recent spectacular upmove and ended at 85.19 from 84.36 and also dropped further against the euro to finish at 72.83 from 72.67 earlier.
But, it recovered against the Japanese Yen to close at 59.56 per 100 yens from 59.60 earlier yesterday.
In the forward market, premium for dollar displayed a sluggish trend due to fresh receivings from exporters.
The benchmark six-month premium for July settled lower at 155-157 paise from 158-160 paise and the far-forward January 2018 contract also dropped to 272-274 paise from 276-278 paise on Tuesday.

Crude prices dipped marginally, largely weighed down by ongoing high supplies despite an OPEC-led production cut.