Mumbai: The rupee climbed on Thursday with the prospect of further US rate cuts weighing on the dollar, but dealers remained cautious about central bank intervention against the local unit.
At 9:15 am, the rupee was at 39.747/757, inching up from the previous close of 39.78/79. It fell to a five-month low of 40.25 last week.
The dollar hovered near record lows versus the euro as a sharp drop in durable goods orders and home sales fueled recession concerns, while Federal Reserve Chairman Ben Bernanke signalled a readiness to cut interest rates again.
Dealers expected the rupee to be capped by demand for dollars from oil companies, as they typically step up their purchases of the US currency at month-end to make overseas payments.