Rupee settles 2 paise up at 95.89 against dollar after breaching 96 level

Rupee recovers from below 96 as RBI-backed dollar selling offsets Fed rate hike, foreign outflows and elevated crude prices

The rupee staged a spirited recovery after slipping below the 96 level intraday and settled higher by 2 paise at 95.89 against the US dollar on Thursday on heavy dollar selling by banks, snapping its seven-day falling streak.

The local currency breached the 96 level to hit a low of 96.10 to a dollar in day trade after a 25 basis point rate hike by the US Federal Reserve, sustained foreign fund outflows from stock markets and high crude oil rates.

Forex traders said that dollar selling by banks on behalf of the RBI helped the local unit recoup losses and hit a high of 95.78 to a dollar. A slight correction in the dollar index and crude oil prices also supported investor sentiment despite global geopolitical volatility, they added.

At the interbank foreign exchange market, the rupee opened higher at 95.88 but soon reversed gains and hit the intraday low of 96.10, breaching the 96 level for the first time since July 24.

The unit recovered during the session and touched the high of 95.78 before settling at 95.89 against the US dollar, up 2 paise from the previous closing level, breaking the seven-day falling trend.