At 10:10am, the partially convertible rupee was at Rs51.57/59 per dollar, 0.5% stronger than Monday’s close of Rs51.85/87
The Indian rupee rose to its strongest in nearly a week on Thursday as gains in the domestic share market calmed nerves about capital outflows, with the dollar’s weakness overseas also underpinning sentiment.
At 10:10am, the partially convertible rupee was at Rs51.57/59 per dollar, 0.5% stronger than Monday’s close of Rs51.85/87. Markets were shut on Tuesday and Wednesday for local holidays. “The rise in stocks is helping the rupee. It may trade in a range of Rs51.40 to Rs51.70-75 levels,” said V Kumar, chief dealer with State Bank of Travancore.
Indian shares rose more than 2% early as investors tried to catch up with gains on Wall Street during the two-day local holiday.
“Inflation and industrial output data also may provide some triggers for the rupee later in the day,” Kumar said.
Dealers said the market had factored in inflation close to 2.5% and anything lower than that would help the rupee rise but a sharp drop in factory output would reverse the effect.
The annual inflation rate is expected to have dropped to near seven-year lows of 2.34% at the end of February while industrial output is forecast to have contracted in January by 0.4% from a year earlier.
Dealers said built-up dollar supplies during the holidays were helping ease pressure on the local unit while the US unit’s losses against other majors were also boosting sentiment.
The yen rose against the dollar on Thursday, extending the previous session’s sharp gains, while the New Zealand dollar climbed after its central bank cut interest rates less than some expected, but still to a record low.
The dollar index, a gauge of the US unit’s performance against majors, was down 0.4%.
