Rupee surges 67 paise in steepest one-day gain in a month

Mumbai: The rupee joined continental peers on Wednesday to log its steepest single-day gains in more than a month, climbing 67 paise through a session marked by a $8/barrel retreat in crude oil prices, after Iran and the US indicated they would redouble diplomatic efforts to break the deadlock in peace talks. Stocks climbed while bond yields slipped below 7%.

From Tuesday’s life-time closing low of 95.28 to a dollar, the rupee advanced to 94.61/$ at close Wednesday, climbing to reflect the broader relief expected from lower automotive fuel prices in a country that is import-dependent for four-fifths of its energy needs.

To be sure, the rupee traded below 95/$ for the first half of the session, and later gained toward 94.60/$ after US President Donald Trump signalled a thaw in talks. The currency traded between 94.55/$ and 95.19/$ during the day.

“The rupee was near 95/$ for a long time before gaining. If the current stance on war were to persist and if there are no contradicting statements from Iran, we may see further gains towards 94/$,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

The rupee logged its sharpest single-day gain since April 2, when regulatory measures by the central bank drove a rebound from record low levels, according to Reuters.

Bhansali expects the rupee to trade between the range of 94.25 and 95 on Thursday.
The level of 94.55/$ also triggered importer dollar demand, traders said.