Rupee at 1-month high as shares rise; dollar eyed

Rupee at 1-month high as shares rise; dollar eyed

Mumbai: The Indian rupee strengthened to its highest in a month on Friday tracking local shares, and traders said they would watch the performance of the US dollar overseas in the wake of an expected sell-off.

At 9:55am, the partially convertible rupee was at 46.11/12 per dollar, its strongest since 19 May. It had closed at Rs46.30/31 on Thursday.

“The boost is because of stocks today. But resistance is seen at around 46 levels and the rupee is not expected to strengthen beyond that," said a senior trader at a foreign bank, adding that he does not expect the rupee to get weaker than Rs46.25 on Friday.

The index of the dollar against six major currencies was down 0.19 percent, and Indian shares were trading 0.42 percent higher on course for an eighth straight day of rise.

Foreign fund flows into and out of the sharemarket influence the rupee’s fortunes. So far in June, foreigners have bought a net $590 million worth of shares, after pulling out around $2 billion in May. They are net buyers of $5.2 billion in 2010.

The euro held steady near three-week highs on Friday, on track for its second straight week of gains, while the dollar appeared vulnerable to further losses after falling below a key chart level.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at Rs46.1625.