MUMBAI: The rupee registered the highest single-day gain in nearly two months and surged by 25 paise to 82.47 against the US dollar in early trade on Thursday amid a weakening dollar, foreign funds inflows and positive equity markets.
According to reports, the rupee’s sharp gain of 52 paise in the past two sessions was attributed to Reserve Bank of India’s move to prevent banks from indulging in short-term trading in offshore currency markets.
Forex traders said selling pressure in the greenback and retreating crude oil prices also boosted the Indian currency even as investors traded cautiously ahead of the BRICS summit and US Federal Reserve Chair Jerome Powell’s speech at Jackson Hole Symposium during August 24-26.
At the interbank foreign exchange, the domestic unit opened strong at 82.55 and touched the peak of 82.36 against the American currency. It later traded at 82.47, registering a rise of 25 paise over its previous close.
On Wednesday, the rupee had appreciated by 27 paise to close at 82.72 against the US dollar.
Earlier, the domestic unit witnessed the highest single-day gain of 35 paise on June 16 this year.
“Rupee strengthened sharply in yesterday’s session on the back of some sources suggesting that the RBI has asked banks to stop taking fresh arbitrage positions in the NDF (non-deliverable forward) market. Suspected dollar selling triggered a move for the rupee. The move has come ahead of the Jackson Hole Symposium that is scheduled later this week,” said Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial services.
He said US Fed Chair Powell is expected to “maintain a hawkish tone and that could restrict losses for the greenback”.
On Wednesday, the dollar weakened after preliminary manufacturing data released from the US came in below estimates. The data showed that manufacturing PMI fell in July compared to the previous month. It was not only the US but other economies too reported a lower number.
“Today, on the economic calendar front, durable goods data will be the only data to watch for. We expect the USDINR (Spot) to trade sideways with a negative bias and quote in the range of 82.30 and 82.80,” Somaiya said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.04 per cent to 103.38.
