Mumbai: The rupee climbed towards a fresh 1-month high on Thursday following the dollar’s weakness against some Asian currencies and a firmer stock market.
Demand for dollars from oil refiners could limit the rupee’s rise, which has been underpinned by a revival in foreign investment in the stock market this month, said traders.
At 10:15am the partially convertible rupee was at Rs47.34/35 per US dollar, 0.7% stronger than Wednesday’s close of Rs47.67/69. On Tuesday, it hit an intraday high of Rs47.22 highest since 10 November.
“We should see another ranged day with gains likely to be capped by oil refiner dollar buying,” said a senior dealer at a foreign bank.
In December, the rupee has gained 6%, on the back of about US $440 million ploughed into stocks by foreign portfolio investors.
Sentiment was also bolstered by the dollar’s slide to a 2-month low against the euro on Thursday after the Federal Reserve’s interest rate cut further eroded the greenback’s relative yield appeal.
Oil steadied around US $40 a barrel, near its lowest in more than 4 years, as further evidence of slowing demand trumped Opec’s biggest ever production cut.