Mumbai: Indian rupee strenghtened to its highest in a week on Friday afternoon following gains of over 2% in the domestic shares and a sharp fall in the dollar versus major currencies overseas.
By 12:13pm the partially convertible rupee was at 47.30/31 per dollar, off a high of 47.17, its strongest since 22 May and above Thursday’s close of 47.60/62.
The dollar index, a gauge of the US unit’s performance versus six majors, was down 0.4%.
The dollar slipped towards a five-month low against a basket of currencies as signs the global recession may have passed its worst and concern about ballooning US government debt prompted investors to sell the safe-haven currency.
Indian shares extended gains to over 2.5% on Friday morning, as investor confidence was lifted after the country’s economy grew a faster-than-expected 5.8% in the March quarter.
In the currency futures market, the most traded near-month contract on the National Stock Exchange and MCX-SX were both quoting at 47.4250 each, with the total traded volume on the two exchanges at about $380 million.