Rupee stays strong on share gains, weak dollar

Rupee stays strong on share gains, weak dollar

Mumbai: The Indian rupee continued to trade stronger in afternoon session on Wednesday tracking gains in domestic shares and boosted by the dollar’s weakness versus major currencies.

At 2:05pm, the partially convertible rupee was at Rs44.45/46 per dollar, stronger than Rs44.66/67 at close on Tuesday.

The dollar came under broad selling pressure on Wednesday, with investors pushing it towards key lows against the euro, the Swiss franc and a basket of currencies on more signs pointing to US monetary easing.

Indian shares were trading 1.8% higher on Wednesday, underpinned by robust foreign portfolio investment and firm Asian equities.

Hopes for foreign inflows remain upbeat with state-owned Coal India set to open its initial public offering next Monday, to raise up to $3.5 billion.

Traders will watch the inflation data due around noon on Friday for clues on the central bank’s policy direction at its review on 2 November.

India’s wholesale price index in September probably rose 8.5% from a year earlier, unchanged from its rise in August. Forecasts from 20 economists ranged from 8% to 8.7%.

One-month offshore non-deliverable forward contracts were quoted at Rs44.66, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were all at 44.56, with the total traded volume on the three exchanges at $3.7 billion.