Mumabi: The Indian rupee rose on Wednesday, buoyed by weakness in the US unit versus majors overseas but pared some of its rise in mid-morning trade as local shares turned negative after having risen nearly 1% early.
At 10:55pm, the partially convertible rupee was at Rs47.69/70 per dollar, off an early high of Rs47.595, but still a little stronger than its previous close of Rs47.73/74.
On Tuesday, the rupee had risen to as much as Rs47.43, its strongest since 12 June. “The rupee has gained as expected. It should be rangebound today with a slight downward bias. Rs47.50-47.80 is the expected range for the day,” said Ashtosh Raina, head of foreign exchange trading, at HDFC Bank.
Dealers said weakness in the dollar versus majors and a positive start to the domestic share market had helped the rupee rise, but added that they would be watching out for cues on direction of capital flows.
The dollar was steady near 2009 lows against the euro and sterling on Wednesday, after a surprisingly strong US housing report the previous day boosted hopes that the worst of the recession was over.
The dollar index, a gauge of the US units performance versus six majors, was down 0.1%. Most Asian units were also stronger against the dollar.
Shares rose 0.9% early with positive economic data from the United States lending support, but were trading down 0.3% as caution prevailed across Asia after the recent rally.
Foreigners have so far in 2009 bought $7.6 billion worth of local stocks, after net sales of more than $13 billion last year.
One-month offshore non-deliverable forward contracts were quoting Rs47.71/81, largely unchanged from the onshore spot rate, indicating a bullish outlook in the near term.
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