The rupee extended gains for the sixth session in a row on Friday, hitting a high of 46.98 against the dollar. It, however, pared gains and was quoted at 47.14/15 a dollar in late morning trade, still 23 paise up from the previous close of 47.37/38 a dollar. This is the highest level recorded by the rupee over the past 5 months, ie, after 19 December 2008. The rupee resumed trading on the interbank forex market at 47.15/20 to a dollar, up from its previous close of 47.37/38 a dollar. The local currency later hit a five-month high of 46.98 against the US unit. However, the rupee later pared gains due to some dollar buying by banks, probably on behalf of oil companies. Rupee's gains were aided by expectations of inflows of foreign capital and a fall in the value of the greenback. The rupee also drew support from rising stocks and signs of increased capital inflows. The dollar's fall against a basket of currencies on fears of the US losing its `AAA' currency rating also gave a fresh impetus to the Indian currency, dealers said. Rupee's strength also pulled down bullion prices in both the spot and futures markets, making dollar-priced gold cheaper. The June contract MAUM9 hit a low of Rs14,456 per 10 gm in early deals and was down 0.19 per cent at Rs14,462 in the afternoon trade. The rupee had gained 4.3 per cent in the previous three sessions.

Source