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Rupee snaps three consecutive sessions’ losing streak tailing rally of local equities

20 Dec 2013 Evaluate

Indian rupee, snapping three consecutive sessions’ declining streak and recovering early losses, ended strong on Friday, tailing the rally in local equity markets as traders adjusted their position ahead of F&O expiry week. The currency also recouped their losses after finance minister P Chidambaram underscored that India is better prepared than in May to deal with any consequences of the US Federal Reserve’s move to wind down its economic stimulus. Meanwhile, the currency also regained momentum as investors reassessed the impact of the Federal Reserve's decision to taper its stimulus program on interest rates and capital flows. However, dollar’s firmness overseas limited further appreciation of Indian currency. On the global front, dollar hit a five-year high versus the yen on Friday as the fallout of Wednesday's decision by the Federal Reserve to begin cutting bond-buying seeped into markets, driving U.S. Treasury yields higher.

Finally the rupee ended at 62.03, stronger by 9 paise from its previous close of 62.12 on Thursday. The currency touched a high and low of 62.40 and 62.02 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 62.24 and for Euro stood at 84.87 on December 20, 2013. While, the RBI’s reference rate for the Yen stood at 59.59, the reference rate for the Great Britain Pound (GBP) stood at 101.8092. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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