Mumbai: The Indian rupee fell on Thursday after hitting a two-week high early, as the dollar gained against major currencies and choppy shares ahead of next week’s budget dampened sentiment.

The partially convertible rupee ended at 47.95/96 per dollar, compared with Wednesday’s 47.88/90. It hit 47.74 in early trade, its highest since 16 June.

“Although oil prices were a comforting factor, there was little support from the stock market so the initial gains were erased,” a dealer with a private sector bank said.“Nobody wants to keep a position till the budget is out,” he added.

The government said in a report the economy could grow 7% this year and more in coming years if it made sweeping reforms including removal of fuel subsidies, and speeds infrastructure development.

The report, ahead of the budget on Monday, also projected the current account surplus to be between 0.3-2.8% of gross domestic product in 2009-10. In the last fiscal year, the deficit was 2.6%.

The dollar rose on Thursday, recovering from a near three-week low against the euro as traders booked profits on short positions in the U.S. currency ahead of key U.S. unemployment figures due later in the day.

Trading in Indian shares were volatile and the 30-share BSE index gained marginally as investors waited for the budget.

The index had leapt 49.3% in April-June, its biggest quarterly gain in 17 years, in anticipation of an economic rebound.

Oil fell around $1 to just above $68 a barrel on Thursday as US gasoline stocks were bigger than expected. India imports about 70% of its crude and lower prices reduce demand for dollars.