Mumbai, India (BBN)-The rupee was trading higher at 68.68 on fresh selling of the American currency by exporters and banks.
According to forex dealers, a firm domestic equity market supported the rupee but the dollar’s strength against other currencies overseas capped the gains, reports The Hindu Business Line.
The domestic unit opened up by 3 paise at 68.73 at the Interbank Foreign Exchange market today. It hovered in a range of 68.76 and 68.60 before quoting at 68.68, up 8 paise at 4:35pm Indian local time.
The rupee had yesterday had tumbled by 30 paise to end at a fresh 2016 low of 68.76. It had hit an intraday low of 68.80 mainly due to deteriorating sentiment and worsening impact of fund outflows.
Meanwhile, the 30-share Sensex ended higher by 43.84 points or 0.17 per cent at 26,394.01, its highest closing since November 11, when it had closed at 26,818.82.
The dollar inched higher on Tuesday after a rollercoaster 24 hours which traders say may just be a precursor to three weeks of risk-packed events for the $5 trillion a day currency market.
Widely expected to rise next year on Donald Trump’s promised fiscal boost for the US economy, the dollar has peaked and troughed since Thursday’s Thanksgiving holiday with the dominant tone some profit-taking on gains since the November 8 election.
The rupee has shed 3.95 per cent of its value since the beginning of 2016.
Foreign investors have pulled out close to $5 billion from the capital markets in November so far amid concerns over the impact of demonetisation mingled with an imminent rate hike by the US Federal Reserve.