FOREX UPDATE: Rupee recovers to close at 62.16, snaps four-day fall

The rupee snapped its four-day falling trend and recovered by 9 paise to end at 62.16 against the broadly stronger greenback on the back of fresh dollar selling by banks and exporters.

Moreover, dealers avoided taking any long dollar positions ahead of the extended weekend.

The currency resumed lower at 62.32 a dollar at the Interbank foreign Exchange (Forex) market and weakened further to 62.34 due to initial dollar demand as well as volatile equities.

However, the domestic currency staged a dramatic recovery in late afternoon trade and closed at 62.16 per dollar, showing a smart gain of 9 paise, or 0.14 per cent.

The local unit had lost 33 paise to close at 62.25 against the dollar on Wednesday-its lowest level in one-week amid RBI Governor Raghuram Rajan's comment that an "excessively strong rupee" is undesirable as it triggers disinflationary pressures.

Both the benchmark indices staged a modest rebound after Wednesday's fall with benchmark Sensex rising over 68 points and the Nifty moving up by 15 points.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 2,786.24 crore on Wednesday, as per provisional data.

Benchmark Brent crude continued to trade above the $60 a barrel mark.

The Dollar index (DXY) extended its recent upside momentum against a basket of six major currencies following healthy growth indicators in the US economy and was up by 0.24 per cent to hit 96.21 - its highest level in 11-1/2 year.

The forward premia slipped further on sustained receiving from exporters.

The benchmark six-month premium payable in August moved down to 231-233 from overnight level of 233.5-235.5 paise and the forward contracts maturing in February 2016 also weakened to 448.5-450.5 as compared to 451-453 paise.

The Reserve Bank of India fixed the reference rate for dollar at 62.2015 and for Euro at 68.6020.

The rupee rebounded sharply against the pound to 94.72 per pound from 95.51 previously and also recovered against the euro to 68.67 compared with 69.27.

It also recouped to 51.74 per 100 yen from 52.02 on Wednesday.