At Interbank Foreign Exchange (forex) Monday, rupee opened on a firm note at 69.38.Mumbai:The rupee pared early gains but managed to end 4 paise higher at 69.68 against US dollar Monday following dovish stance by Federal Reserve and rising hopes of a thaw in ongoing US-China trade tiff.
Besides, smart gains in domestic equities and weakening of greenback in overseas markets propped up currency.
This was second straight session of gain for domestic unit.
It had risen by 48 paise to settle at 69.72 against US dollar on Friday.At Interbank Foreign Exchange (forex) Monday, rupee opened on a firm note at 69.38.
It gained further to hit a high of 69.23 following dollar selling by exporters, before finally closing at 69.68, up 4 paise.Traders mainly attributed rupee firmness to sustained selling of American currency by exporters following US Fed chief Jerome Powell''s hints that central bank will apply brakes on its tightening of monetary policy this year."Clearly, Fed is at tail end of a rate hiking regime and a move towards neutral policy will be welcome for financial markets in 2019.
Positive sentiments reverberated across US and Asian markets," said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.Globally, sentiments were high after two major super economies US and China expressed interest in settling their tariff war.
Envoys of both nations will have discussions during meetings on Monday and Tuesday.Meanwhile, dollar index dropped by 0.25 per cent to 95.93 against a basket of six currencies in late afternoon trade.The Financial Benchmark India Private Ltd (FBIL) set reference rate for rupee/dollar at 69.4814 and for rupee/euro at 79.3890.
The reference rate for rupee/British pound was fixed at 88.5943 and for rupee/100 Japanese yen at 64.21.Meanwhile, brent crude, global benchmark, was trading at $58.46 per barrel, up 2.45 per cent."Brent prices shot up as working oil rigs in US fell for first time in three weeks signaling slowing production in US.
This likely led to bullish sentiments pulling back a bit in late afternoon," Mr Sharma added.Foreign funds pulled out Rs 157.72 crore from capital markets on a net basis, while domestic institutional investors purchased shares worth Rs 240.60 crore Friday, provisional data showed.