Rupee strengthens on increased selling of American currency by banks and exporters

Indian rupee strengthened against the US dollar on Wednesday on increased selling of the American currency by banks and exporters amid strong foreign fund inflows. Besides, weakness of the dollar against other currencies overseas after data showed activity in the US service sector slowed sharply last month, which lowered the chances that the US Federal Reserve will hike rates this month, too supported domestic currency. Furthermore, gains in the Asian currencies markets and a higher opening in the domestic equity market also boosted the rupee value against the dollar. However, traders are cautious ahead of the European Central Bank’s policy decision on benchmark interest rate number due on Thursday.

The partially convertible currency is currently trading at 66.38, stronger by 14 paise from its previous close of 66.52 on Tuesday. The currency touched a high and low of 66.3975 and 66.3250 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.54 and for Euro stood at 74.16 on September 6, 2016. While the RBI’s reference rate for the Yen stood at 64.20, the reference rate for the Great Britain Pound (GBP) stood at 88.64.The reference rates are based on 12 noon rates of a few select banks in Mumbai.