Mumbai: The rupee continued its north-bound journey for the third week in a row, appreciating by 29 paise to close the shortened week at more than three week high of 60.47 against the US dollar on record-breaking local equities amid sustained foreign portfolio investments.
The forex market was closed on Monday, August 18, 2014, on account of 'Parsi New Year'.
Despite firm dollar overseas, continued selling of the American unit by exporters and some banks also aided the rupee rally.
The rupee was seen gaining against the USD after Standard & Poor's said efforts to cut the budget deficit are positive for the country's credit rating, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced the week a tad lower at 60.77 a dollar from last weekend's close of 60.76 and touched a low of 60.88 on Tuesday as dollar index hit the 11-month high, trading above USD 82 -- highest since September last week -- against its major global rivals following the gradual strengthening of the US economic outlook.
Dollar demand from importers, mainly oil refiners, too weighed on the rupee.
Later, it bounced back with a vengeance to a high of 60.3750 on strong rally in local equities to new peaks and heavy capital inflows in domestic stocks as well as bonds.
Rally in the dollar against its key rivals after the Federal Reserve is scheduled to end its asset purchase programme by October 2014 and a string of upbeat US economic data could not put pressure on the rupee.
The rupee closed the week with a gain of 29 paise, or 0.48 percent, at 60.47, a level not seen since July 30, 2014 when it had finished at 60.06.
In straight three weeks, it has gained 71 paise or 1.16 percent.
The benchmark S&P BSE Sensex closed the week with a gain of 316.32 points, or 1.21 percent while FIIs bought shares worth USD 433.19 million in straight five sessions since August 14. The Sensex and CNX Nifty logged their new peaks during the week.
Pramit Brahmbhatt, Veracity Group CEO said, "The rupee appreciated for the third consecutive week. It rallied over quarter per cent taking cues from strong local stocks which marked the milestone of all-time high.
"While the demand for dollars from oil importers and corporates forced rupee to give up some gains during the mid-week. The immediate resistance for the rupee is at 60.35 once breached comfortably we can see the rupee trading at 60.00 levels. The trading range for the spot rupee is expected to be within 60.00 to 61.00."
In the forward market, premium dipped further on constant receipts by exporters.
The benchmark six-month forward dollar premium payable in January moved down to 220.5-221.5 paise from 227-231 paise last week and far-forward contracts maturing in July 2015 also dropped to 466.5-467.5 paise from 473-475 paise.
The RBI fixed the reference rate for the USD at 60.4360 and the euro at 80.3535 from preceding weekend's close of 61.0583 and 81.5552.
The rupee flared up further against the pound sterling to end the week at 100.20 from 101.34 previous weekend and also continued to rule firm against the euro to 80.24 from 81.27.
It improved further sharply to 58.31 per 100 Japanese yen from last weekend's close of 59.34.
