Rupee rebounds early vs US Dollar, YEN, EURO

The rupee recovered smartly to end at 40.4200/4250 against the US currency on the back of a strong surge in equity markets and consistent weakness in dollar overseas.

A day after heavy intervention by the Reserve Bank of India (RBI), the local currency bounced back in the absence of any dollar demand.

In active trade at the Interbank Foreign Exchange (forex) market, Indian unit resumed better at 40.47/48 per dollar from yesterday's close of Rs 40.50/51 per dollar and later moved in a range of 40.4150 and 40.4950 during the day.

The RBI was absent in the exchange market after it reportedly bought about USD 400 million yesterday, forex dealers said.

The rupee also drew support from surging equity markets on the back of consistent and heavy FII inflows in the current month as well as weak dollar against some major world currencies, they added.

The strengthening rupee has hurt exporters margins and in turn forced the central bank to contain the currency surge.

The government yesterday announced a Rs 1,400 crore relief package for exporters hit by rupee appreciation.

The dollar fell to a record low against the euro in the last couple of days on worries that US sub prime mortgage sector problems could spread to other parts of the economy.

The RBI fixed the reference rate for the US currency at Rs 40.47 per dollar and for the single European unit at Rs 55.74 per euro.

The rupee premiums on forward dollar moved down on fresh receiving by exporters.

The Benchmark six-month forward dollar premiums payable in December ended at 34 - 36 paise, down from 38 - 40 paise on Thursday and the far-forwards maturing in June also closed lower at 74 - 76 paise from 79 - 81 paise previously.

In cross-currency trades, the rupee also improved against the British sterling, the Euro and the Japanese Yen.

The Indian unit moved up moderately against sterling to close the day at Rs 82.14/16 per pound from yesteray's close of Rs 82.31/33 per pound and also firmed up against the single european currency to Rs 55.68/70 per euro from previous close of Rs 55.83/85 per euro.

The rupee advanced further against the Japanese unit to end at Rs 33.03/05 per 100 yen against last close of Rs 33.17/19 per 100 yen.