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Rupee at near 2-month high on shaky dollar

Rupee at near 2-month high on shaky dollar

Mumbai: The rupee rose to its highest in nearly two months on Monday, after local share prices closed at their highest in more than six weeks, boosted by the dollar’s weakness against the euro.

The partially convertible rupee ended at 45.53/54 per dollar after hitting 45.38, its strongest since 12 January, and about 0.2% above its close of 45.60/61 on Friday.

“Positive stock markets have raised expectations of capital inflows in the coming weeks," said a senior trader with a foreign bank, adding he expects the rupee to trade in the 45.40 to 45.60 range on Tuesday. The BSE benchmark Sensex ended 0.6% higher, to its strongest closing in more than six weeks. Foreign capital in local equities is a key driver of the rupee.

Foreign investors are net buyers of about $1.9 billion in the 12 weeks to 5 March, according to Nomura.

“The dollar’s movements overseas also helped sentiment," the trader said. The dollar weakened against the yen after Friday’s above-forecast US jobs data showed employers cut fewer jobs than expected in February, raising expectations the world’s largest economy was close to creating jobs.

The dollar index versus six majors was down about 0.1%.

One-month offshore non-deliverable forward contracts were at 45.52/60.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX closed at 45.6075 and 45.6175 respectively.

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