Mumbai: The rupee strengthened in afternoon trade on Friday nudged by firm local equities but strong dollar demand, most likely for defence-related payments, limited the rise, traders said.
At 12:43pm, the partially convertible rupee was at 49.08/09 per dollar, higher from Thursday’s close of 49.14/15. It had moved in a band of 48.98 and 49.14 so far.
Movement in the euro could provide cues for rupee movement in rest of the session given the focus on developments in Europe’s debt saga, they said.
The euro has run into stiff resistance after a rebound sparked when Greece effectively abandoned plans for a referendum on its bailout package, as market players worry that protracted political instability could bring further flare-ups in the euro zone’s debt crisis.
The euro was at $1.3827, compared with $1.3800 at the end of local trade on Thursday, while the index of the dollar against six major currencies was at 76.726 points versus 76.807 points.
The local benchmark share index was up more than 0.8% on better-than-expected domestic corporate earnings.
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