Mumbai: The Indian rupee strengthened to its highest in more than a week on Friday as traders sold dollars on expectations of gains in the local sharemarket and watched the US unit’s moves versus majors for direction.
At 9:30am, the partially convertible rupee was at Rs46.78/79 per dollar, off an early high of Rs46.7650, its strongest since 27 October and half a percent above its previous close of Rs47.0150/0250.
“Stocks are up globally, which is supporting sentiment for the rupee as well,” a senior dealer at a private bank said, predicting a range of Rs46.70-46.90 for the day.
At 0400 GMT, the MSCI index of Asian stocks ex-Japan was 1.7% higher, while the Nifty India stock futures traded in Singapore were up 0.9%.
Local shares opened higher, mirroring the rise in world equities after better-than-expected US jobs data bolstered investor confidence in the global economy.
Foreign funds have so far this year purchased a net $14.2 billion worth of Indian shares, helping the rupee recover from a record low of 52.2 in early March. Last year, they had sold more than a net $13 billion, pushing the rupee down by a fifth.
The dollar held steady on Friday with investors consolidating positions ahead of October non-farm payrolls data due later in the session, a report that would highlight the durability of an economic recovery.
One-month offshore non-deliverable forward rupee contracts were quoting at Rs46.74/84, marginally stronger than the onshore spot rate, suggesting a bullish outlook in the near term.