MUMBAI: The rupee continues to trade higher from its Monday close on the back of an upswing in stocks and dollar sliding against major
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currencies. On Monday the rupee had hit a two week low.
The greenback was trading in the green earlier, but downward pressure on the dollar emerged after stronger-than-expected UK housing figures helped boost sentiment for non-dollar currencies.
At 2.30pm, the rupee was at 47.48 against the dollar as against its Monday's close of 47.56. Dealers also said banks covered short dollar-rupee positions in the background of the rising dollar earlier in the session.
"In addition to risk appetite, with India back on the radar following the election results, capital flows are likely to remain buoyant. This will result in a continued appreciation in the rupee. However, with exports still deep in the red, we could see authorities’ moderate the pace of appreciation," said Citigroup's Rohini Malkani in a report to clients.
Key share market benchmark index- BSE Sensex rose about 2.8%, as investors lapped up shares after a 2.9% fall in the previous session.
Bonds are trading mixed and largely flat as they gear up for another Rs 15,000 crore auction on Friday. The yield on the 7.59% paper expiring in 2016 was trading at 6.93%, 2 basis points higher over its previous close.
