Indian rupee rise to its highest in two weeks today
December, 03rd 2010
The Indian rupee rose to its highest in two weeks on Friday, bolstered by gains in the euro and foreign inflows toward share sales by companies.
At 10:19 a.m. (0449 GMT), the partially convertible rupee was at 45.11/1175 against the dollar after hitting 45.105, its highest since Nov. 17 and stronger than Thursday's closing of 45.275/285.
"There is selling on expectations of capital flows and on the weakness of dollar," said Vikas Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank in Mumbai.
Traders said demand for dollars could rise with oil prices holding up, and forecast the rupee to move in 45.10-35 range during the day.
India buys most of its oil and refiners are the largest buyers of dollars in the domestic currency market.
Oil was steady near 25-month highs on Friday following a slew of upbeat U.S. economic data that boded well for demand from the world's top user, ahead of a jobs report expected to show employment expanded for a second straight month in November.
Foreign funds have bought $415.63 million worth of shares in the three trading sessions to Wednesday, latest data shows, taking net investments to $29.1 billion in 2010.
Capital inflows toward a series of public equity issues should also keep the rupee supported, dealers said.
State-run Shipping Corporation of India aims to raise up to $259 million through a share sale that closes on Friday.
The main stock index seesawed in early trade, but is on track to post its first weekly rise in four weeks.
The euro's rebound from a 2-1/2-month low stalled on Friday, though it retained most gains made after talk of European Central Bank buying of euro zone periphery debt helped knocked down those yields.
Traders are awaiting to the U.S. jobs data, due at 1330 GMT, which is expected to show an increase of 140,000 jobs last month, according to a Reuters survey.
One-month offshore non-deliverable forward contracts were at 45.33, weaker than the onshore spot rate, suggesting a bearish near-term outlook.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange , MCX-SX and on United Stock Exchange at 45.33. Total traded volume on the three exchanges was moderate at $788 million.