Mumbai: The rupee today closed at an over two-month high of 66.75 per dollar by gaining 47 paise on persistent selling of the American currency by banks and exporters after the US Fed indicated a slower pace on rate hike.
Fresh foreign capital inflows also boosted the rupee value against the dollar, a forex dealer said. The benchmark Sensex ended steady at 24,677.37 after moving in a wide range of 24,948.30 and 24,576.52. The rupee resumed higher at 66.90 as against the yesterday’s closing level of 67.22 per dollar at the Interbank Foreign Exchange market and firmed up further to 66.64 before ending at more than 2-month high at 66.75, showing a gain of 47 paise or 0.70 per cent.
It had last ended at 66.63 per dollar on January 8, 2016. The rupee has gained by 63 paise or 0.93 per cent in two days.
Weakness in the US dollar persisted during Asia trade today, briefly hitting a three-week low against the yen. The dollar dropped swiftly and sharply against main rivals today after the Federal Reserve cut an old projection for US interest rate hikes to two from four for 2016, a move that initially spurred a risk-on rally throughout global equities and oil.
The Fed on Wednesday injected more caution into its outlook, including for interest-rate increases this year. And although dollar-supportive higher rates in the US stand in marked contrast to easier monetary policy in Europe, Japan and elsewhere, traders unwound some of their pro-dollar stance.