India’s rupee strengthened for a second day as global stocks rallied on speculation the U.S. will reach an agreement to cut its budget deficit. The Bombay Stock Exchange’s Sensitive Index rose 0.3 percent after President Barack Obama endorsed a $3.7 trillion debt-reduction plan yesterday that would combine tax increases and spending cuts. All of Asia’s 10 most-traded currencies gained, with the Bloomberg-JPMorgan Asia Dollar Index touching a 14-year high. Any positive news from the U.S. and Europe will dictate overseas fund flows into India, said Paresh Nayar, head of money markets and currency at FirstRand Ltd. “The market is currently looking mainly at equity flows from foreign investors to gauge if they can be sustained,” Mumbai-based Nayar said. The rupee advanced 0.1 percent to 44.4675 per dollar as of 10:16 a.m. in Mumbai, according to data compiled by Bloomberg. It touched 44.4450 earlier, the strongest level since July 14. Offshore forwards indicate the rupee will trade at 45.01 in three months, compared with expectations of 45.05 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars. To contact the reporter on this story: Jeanette Rodrigues in Mumbai at jrodrigues26@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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