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Rupee at over 1-month high on shares gain, weak dollar

Rupee at over 1-month high on shares gain, weak dollar
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First Published: Tue, Aug 03 2010. 08 21 PM IST
Updated: Tue, Aug 03 2010. 08 21 PM IST
Mumbai: The rupee rose to its highest in slightly over a month on Tuesday, as expectations of low US interest rates drove the dollar lower overseas and triggered selling from domestic exporters.
A rise in local share prices also supported sentiment and reinforced expectations of more capital inflows into Asia’s third-largest economy in the coming months.
The partially convertible rupee ended at 46.16/17 per dollar, off an intraday peak of 46.10, its highest since 28 June and about 0.2% higher than its 46.24/25 previous close.
“We are expecting the rupee to weaken from 46.10. We are not bullish at these levels. There has also been a lot of import buying in the last two days,” said PV Rao, head of foreign exchange trading at IndusInd Bank.
“The maximum I see for the rupee is 46.0 or 45.90, not more than that.”
The dollar hit multi-month lows against major currencies like the euro and yen on rising concerns about the pace of economic recovery in the world’s biggest economy and expectations US rates may stay low.
The euro hit a six-month high of $1.3261 according to Reuters data, while the dollar fell to 85.73 yen, its weakest since November 2009. The dollar index, a measure of the US currency’s value versus six majors, was down about 0.5%.
The BSE benchmark index Sensex ended 0.2% higher.
Foreign investors have bought shares worth $10.5 billion since the start of January and helped the rupee rise 0.8% this year. Last year, record inflows of $17.5 billion had boosted the rupee 4.7%.
One-month offshore non-deliverable forward contracts were quoted at 46.31, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX ended at 46.3550 and 46.3575 and total traded volume on the two exchanges at about $4.2 billion.
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First Published: Tue, Aug 03 2010. 08 21 PM IST
More Topics: Rupee | Dollar | Markets | Euro | Currency |