* Rupee trims gains as dollar strengthens versus majors
* Choppy local shares help push rupee off 7-month peaks (Updates to close)
By Swati Bhat
MUMBAI, June 3 (Reuters) - The Indian rupee retreated from seven-month peaks on Wednesday after the dollar rose on comments from Asian monetary sources that they would keep buying U.S. debt even if the credit rating of the United States was downgraded.
Dealers said a choppy share market and some dollar demand from oil refiners also weighed on the rupee.
Sources told Reuters that Asia's biggest central banks believed that even if a U.S. ratings cut were to occur, it would not cause China, Japan, India and South Korea to change their reserves policies because there are no alternatives to the liquidity afforded by the dollar. [ID:nSP412010] [USD/] The partially convertible rupee closed at 47.07/08 per dollar, 0.1 percent weaker than its previous close of 47.02/03. The rupee rose as high as 46.75 during trade, its strongest since Nov. 5.
"The market was overtly bullish on non-dollar currencies, and there was too much of one-way movement, but suddenly the market realised the information is already discounted and so this correction," said Agam Gupta, head of foreign exchange trading at Standard Chartered Bank.
"The rupee is likely to move further up, but there could be a temporary move downwards before that," he added.
India's main stock index climbed above 15,000 points on Wednesday for the first time in nine months, but was beaten back as investors cashed in profits after a three-month rally. [.BO]
