The Indian rupee soared further against the dollar in early trades on Thursday, 16 March 2017 on sustained foreign fund inflows and increased selling of the US currency by exporters and banks.
A higher opening in domestic equity market, the dollar's weakness against other currencies overseas after the Federal Reserve raised interest rates also supported the rupee.
The domestic currency opened at Rs 65.38 against the dollar and climbed further to a high of 65.22 so far during the day. In the spot currency market, the Indian unit was last seen trading at 65.39.
Yesterday, the rupee had continued its stellar run against the dollar to finish at a fresh 16-month high of 65.69 as exporters aggressively offloaded the US currency ahead of the Fed meet outcome.
A decent start to trade was witnessed on the bourses tracking firmness in Asian stocks. At 9:30 IST, the barometer index, the S&P BSE Sensex, was up 197.11 points or 0.67 percent at 29,595.22.
The Nifty 50 index was up 58.25 points or 0.64 percent at 9,143.05. Nifty hit a fresh record high. The BSE Mid-Cap index was up 0.7 percent. The BSE Small-Cap index was up 0.82 percent. Both these indices outperformed the Sensex.
Overseas, Asian stocks followed US stocks higher, as the Federal Reserve raised interest rates without accelerating its timeline for future tightening. Federal Reserve said yesterday, 15 March 2017, that it would raise the benchmark federal-funds rate to a range between 0.75 percent and 1 percent.
Meanwhile, the dollar index against a basket of major currencies was down 0.2 percent at 100.560. It slid more than 1 percent the previous day to touch 100.490, its lowest since Feb. 17.
The greenback took a knock after the Fed ended its two-day policy meeting on Wednesday by increasing interest rates as expected but stuck to projections of three total rate hikes in 2017.
The euro stood tall on Thursday after Dutch election exit polls pointed to a comfortable win by the prime minister over his far-right rival, while the dollar wallowed at a one-month low after the Federal Reserve sounded less hawkish than anticipated on future rate rises. The euro climbed to a five-week high of $ 1.0746 on Thursday, after surging 1.2 percent overnight.
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