Rupee strengthens by 11 paise ahead of US Fed meet

Exporters and banks were seen selling dollars which supported the currency, says Veracity Group CEO

The Indian rupee today extended gains for the second consecutive session, rising 11 paise against the American currency to 62.70 amid a good show by stocks and on selling of dollars by banks and exporters ahead of the two-day US Fed monetary policy meet.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced better at 62.77 a dollar from last close of 62.81.

It then moved in a range of 62.67 and 62.78 before finishing at 62.70 per dollar, showing a gain of 11 paise or 0.18%. The rupee has gained by 27 paise or 0.43% in the two days.

Veracity Group, CEO, Pramit Brahmbhatt said: "Rupee traded strong for the day. Exporters and banks were seen selling dollars which supported rupee. Also, local equities traded strong which helped the rupee movement."

The trading range for the spot USD/INR pair is expected to be within 62.35 to 63.15, he added.

In London, the dollar was almost flat against the yen today ahead of a closely monitored Federal Open Market Committee meeting in the U.S.

The dollar rally paused overseas after possibility that weaker-than-expected US data will prompt the Federal Reserve to adopt a cautious stance. Outcome of the policy meeting will be released on Wednesday.

According to data, manufacturing struggled in February, holding back overall industrial production that rose by a mere 0.1 percent in the month. Reports on homebuilder sentiment and regional manufacturing also were weaker than expected.

The dollar index, a gauge of six major global rivals, was down by 0.08% today.

Meanwhile, the Indian benchmark Sensex ended higher by 298.67 points, or 1.05%, at 28,736.38.