Maintaining its upbeat momentum, the rupee surged by 30 paise to hit a fresh 3 month high of 64.04 against the U.S. dollar, with all exit polls on assembly elections suggesting the BJP retaining Gujarat and returning to power in Himachal Pradesh.
This is the highest closing for the home currency since September 13, when it had closed at 64.00. It was also the biggest single-day gain for the rupee in over three weeks.
Overall currency market sentiment turned extremely bullish after the exit poll outcomes predicted BJP’s win in Gujarat for the sixth time and a clean sweep in Himachal Pradesh elections.
A smart rally in local equities also supported the rupee momentum.
It was further supported by unwinding of long-dollar positions by speculators and some foreign banks with the US dollar down on shaky outlook for the tax reform progress.
Big-picture economic indicators like improving current account deficit and abundant FII inflows largely weighed on the trading front, a forex dealer said. Brent crude, an international benchmark, is trading at $63.25 a barrel in early Asian trade.