MUMBAI: The rupee rose on Monday in anticipation of fresh flows into the domestic sharemarket and underpinned by the dollar's weakness against major units overseas.
At 10:28 am, the partially convertible rupee was at 48.55/56 per dollar, 0.4 per cent stronger than its Friday's close of 48.73/74.
It had risen 0.6 per cent last week, but trading was volatile with the unit falling to a two-month low of 49.47 last Monday and rising to a one-week high of 48.47 on Thursday.
"There is decent dollar buying seen by state-run firms around 48.50 levels today, and we need to technically break the 48.47 mark for the dollar-rupee to head lower," said Madhusudan Somani, head of foreign exchange, at Yes Bank.
Crude futures were trading just above $64 a barrel. It gained 6.1 per cent last week, which was its first weekly gain in a month.
Oil is India's largest import and refiners are the biggest buyers of dollars in the domestic currency market.
Shares rose 1.5 per cent in early trade as increased hopes for strong worldwide corporate earnings and positive US housing data lifted sentiment across Asia.
"Whatever short-term import demand was there in the market seems to be over, so the market is adjusting to the global equity move and the global dollar sell-off," a senior dealer with a private bank said. "It should trade in a 48.35-60 range today."
The US dollar and the yen both ceded ground on Monday as concerns about the US economy abated and broadly improved corporate earnings lifted risk appetite and regional stock markets.
One-month offshore non-deliverable forward rupee contracts traded in Singapore were quoted at 48.58/68, a shade weaker than the onshore spot rate.
Source : The Economic Times