Rupee stages a modest recovery against the dollar

Mumbai: The rupee staged a modest recovery against the American currency after three weeks of decline and ended 10 paise higher at 66.79 on fresh dollar selling by exporters and custodian banks.

It largely withstood the initial implied volatility in the face of month-end demand for the greenback before making a smart rebound. Smooth dollar supply on the back of suspected RBI intervention and heavy unwinding by speculative traders ahead of an extended weekend, too supported the domestic currency, a forex dealer said.

However, massive capital outflows in the face of impending Fed rate hike worries and sluggish domestic equities limited gains. At the Interbank Foreign Exchange market (Forex), the domestic currency resumed virtually steady at 66.89 against the US dollar.

But, gradually drifted lower to hit a low of 66.9350 during the mid week pressure following robust demand for the American unit from importers before regaining strength towards the tail-end trade.

The home unit finally settled at 66.79, showing a good gain of 10 paise, or 0.15 per cent after briefly touching a high of 66.76. It had depreciated by a whopping 28 paise in three-week fall.

In cross-currency trades, rupee recovered against the pound sterling to end at 80.99 from last Friday's closing level of 81.65 and also regained against the Japanese yen to finish at 63.43 from 64.47 per 100 yens.

 On the contrary, it fell back after recent sharp move against the euro and finished at 72.94 from last weekend level of 72.86.