INSUBCONTINENT EXCLUSIVE:
The rupee made a spirited recovery from a two-week low to end higher by 20 paise at 68.68 against the US currency on fresh bouts of dollar
selling by exporters and banks
Forex market largely withstood the initial discomfort and a broad based dollar weakness predominantly helped the rupee to reverse its
bearish undertone.Increased greenback sales by banks on behalf of exporters and rebound in the Chinese yuan also weighed on the trading
Subdued local equity markets and higher crude prices, however, restricted further gains.Fears of a trade war remain the dominant market
theme but currency traders are holding their nerve, a forex dealer commented.However, investor confidence can be seen clearly on the
domestic bourses that have been climbing to record highs since the start of July.The broader NSE Nifty extended its record run for a third
straight session, while the flagship BSE Sensex retreated from record levels in a highly volatile trade on profit-taking at higher
levels.Most Asian currencies weakened against the dollar on Tuesday as revived US sanctions on Iran and escalating trade tensions between
Beijing and Washington tempered appetite for emerging market foreign exchange
On the energy front, oil prices rose sharply on hopes that re-introduced US sanctions against major crude exporter Iran could tighten global
supply.The benchmark Brent for September settlement is trading higher at $74.75 a barrel in early Asian session.Extending overnight
weakeness, the rupee opened lower at 68.91 against 68.88 previously at the Interbank Foreign Exchange (forex) market on sustained dollar
demand from importers.It slipped further to hit a low of 68.93 in early deals before witnessing a strong trend reversal.The home currency
touched a session high of 68.66 before ending at 68.68, revealing a handsome gain of 20 paise, or 0.29 per cent.On Monday, the rupee had
ended lower by 28 paise.The Financial Benchmarks India private limited (FBIL), meanwhile, fixed the reference rate for the dollar at 68.8000
and for the euro at 79.5599.The bond markets, however, succumbed to fresh unwinding and the 10-year benchmark bond yield rose to end at 7.79
per cent.Globally, the US dollar slipped lower against its major trading rivals, giving back some of the previous session gains.Against a
basket of other currencies, the dollar index is trading lower at 94.83.In the cross currency trade, the rupee remained firm against the
pound sterling to end at 89.00 per pound from 89.03 on Monday.The home currency fell back against the euro to finish at 79.60 as compared to
79.43 and dropped further against the Japanese yen to settle at 61.80 per 100 yens from 61.78 earlier.Elsewhere, the pound sterling is
trading little changed on the upside against the US dollar after rebounding from fresh 2018 lows as Brexit related uncertainty and the lack
of economic stimulus both weighed on sentiment.The euro is trading higher after recovering from multi-week lows on the back of weak dollar
sentiment even as the German factory new orders and manufacturing PMI fell dramatically in June.In forward market on Tuesday, premium for
dollar dropped owing to sustained receiving from exporters.The benchmark six-month forward premium payable in December declined to
117.25-119.25 paise from 119-121 paise and the far-forward June 2019 contract eased to 265-267 paise from 266-268 paise previously.
