The Indian currency today turned stronger by 31 paise to 49.46/47 against the US dollar in morning trading as local stocks surged sharply with sustained capital inflows in the equity. In active trade at the Interbank Foreign Exchange forex) market, the rupee resumed firm at 49.60/62 per dollar against its previous close of 49.77/78 per dollar and later surged to 49.46/47 a dollar in late morning deals. Forex dealers said the domestic currency drew support from a rally in local stocks on the back of consistent buying by foreign institutional investors, which are expected to step up their portfolio investments in the current year. FIIs had massively pulled out in the past one year after the US mortgage crisis in the preceding year led to an economic slowdown across the world. They said the rupee sentiment was also aided by absence of any dollar demand from importers. The Indian benchmark Sensex was up 175 points or 1.48 per cent in morning trade today. Asian indices too were trading higher by about one to two per cent this morning.

Source