Mumbai: In a volatile session, the rupee on Monday rose to nearly ten-month high of 59.51 against US dollar but frittered away all the gains to end one paise down at 60.05 per dollar on late demand of the American currency.
At the Interbank Foreign Exchange (Forex) Market, the rupee resumed higher 59.98 per dollar as against the last weekend's level of 60.04 per dollar. It firmed up further to 59.51 per dollar on initial selling of dollars by banks and exporters on the back of sustained foreign capital inflows into domestic equity market.
There was buoyancy in the stock markets ahead of exit polls later today that are anticipated to show a stable government coming to power at the Centre when counting ends on May 16.
The rupee had strengthened to 59.45 in intra-day trade on July 29, 2013. However, the rupee failed to maintain initial gains and closed marginally lower at 60.05 per dollar, registering a loss of one paise. It moved in a range of 59.51 per dollar and 60.12 per dollar during the day.
Banks and exporters initially preferred to reduce their dollar position in view of persistent foreign capital inflows into the equity market. "The USD/INR pair, however, witnessed recovery with rumours that RBI was buying dollars," said Admisi Forex India in a report.
Meanwhile, the benchmark Sensex rose to all-time high of 23,572.88 before ending at 23,551.00, showing a sharp gain of 556.77 points or 2.42 per cent. The dollex index was down by 0.04 per cent against the major curreinces in the international market.
However, in New York Market, the euro slid against the dollar on last Friday, dropping through the $1.38 threshold to its lowest level in a month as traders continued to react to the dovish tone of the European Central Bank.
Pramit Brahmbhatt, Veracity Group CEO, said: "Rupee continued to trade range-bound to slightly strong on the expectation that BJP will be on the winning side in Lok Sabha polls. Later today, exit polls will show results which will give the markets further direction."
Meanwhile, premium for forward dollar eased on fresh receipts by exporters. The benchmark six-month premium payable in October softened to 228-230 paise from 228.5-230.5 paise. Far forward contracts maturing in April, 2015 also finished slightly lower at 466-468 paise from 466.5-468.5 paise. The Reserve Bank of India fixed the reference rate for dollar at 59.7290 and for the euro at 82.2235.
The rupee fell back against the pound to end at 101.39 from 101.33 previously while remained firm against the euro to 82.62 as compared to 82.77. However, it firmed up against the Japanese yen to finish at 58.91 per 100 yen from last weekend's close of 59.04.
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