Rupee extends gains to fresh 1-week highs

Rupee extends gains to fresh 1-week highs

The Indian rupee extended gains in afternoon session on Friday, rising to fresh one-week highs, tracking sharp losses in the dollar versus major currencies and also buoyed by gains in domestic shares.

By 2:15pm, the partially convertible rupee was at Rs46.93/94 per dollar, after rising as high as Rs46.8925, its strongest since July 16, and stronger than Thursday’s close of Rs47.1250/1350.

The index of the dollar .DXY against six major currencies was down 0.4% and would be watched for direction during the day. Most Asian units too rose against the dollar.

Another strong data release boosted the euro on Friday as the German Ifo index came in above forecasts, but analysts said there were downside risks for the currency, even if bank stress test results were benign.

Indian shares were trading 0.3% stronger, taking cues from strong world markets.

Shares are watched for cues on direction of fund flows which have a large impact on the rupee’s fortunes as well. So far this year, foreigners are net buyers of $8.8 billion worth of shares. Last year’s record $17.5 billion inflow had helped the rupee gain 4.7%.

One-month offshore non-deliverable forward contracts PNDF were quoted at Rs47.13, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at Rs46.96, with the total traded volume on the two exchanges at about $3.7 billion.