Rupee at 1-month high; opens at 66.26/$

The currency touched a high and low of 66.21 and 66.24 respectively. India’s current account widened to 1.6% of GDP during the second quarter of the FY 2015‐16, when compared with the reading of 1.2% during the prior quarter.

Indian rupee extended its gain for the seventh consecutive session and opened at 66.26/$ higher by 7 paise in early trade on Wednesday as against the previous close of 66.32/$. Indian rupee traded on a firm ground, deriving cues from sharp fall in oil prices and softness in US dollar against the basket of currencies. RBI’s involvement in the Forex markets has also provided lot of stability to the Indian rupee. India’s current account widened to 1.6% of GDP during the second quarter of the FY 2015‐16, when compared with the reading of 1.2% during the prior quarter. However on yoy basis, the deficit has narrowed from the 2.2% during the same quarter last year.

On global macroeconomic front, US Q3 GDP growth was downwardly revised to 2%, when compared with the earlier estimate of 2.1%. Consumer spending grew at a 3%, in line with the prior projections. Healthy consumer spending is attributed to strengthening employment and housing markets. Low energy prices and ensuing rise in personal savings also boosted spending.

On Tuesday, Indian rupee ended at 66.32/$, higher by 3 paise. The currency touched a high and low of 66.21 and 66.24 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.29 and for Euro stood at 72.33 on December 22, 2015. While, the RBI’s reference rate for the Yen stood at 54.68, the reference rate for the Great Britain Pound (GBP) stood at 98.7052.