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Rupee recovers from one month low on Tuesday; plunge of local equities limits further uptrend

16 Sep 2014 Evaluate

Indian rupee recouped from one month low level on Tuesday on account of bargain hunting activities and strength of other Asian currencies against the dollar, though sharp plunge of local equities capped further appreciation of the Indian unit. The narrowing of trade deficit also aided the rupee, with the August number shrinking to $10.84 billion last month from a 12-month high of $12.23 billion in July. Nevertheless, caution ahead of U.S. Federal Reserve's policy meet, which begins from Tuesday amidst speculation that the Fed could raise interests sooner and faster than previously expected, which weighed on the sentiment of American currency, also aided Rupee’s recovery. Meanwhile, the euro held steady after a selloff sparked by the European Central Bank's interest rate cut early this month faded.

Finally the rupee ended at 61.06, stronger by 8 paise from its previous close of 61.14 on Monday. The currency touched a high and low of 61.14 and 61.01 respectively.  The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 61.10 and for Euro stood at 79.03 on September 16, 2014. While, the RBI’s reference rate for the Yen stood at 56.96, the reference rate for the Great Britain Pound (GBP) stood at 99.0455. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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