Rupee at 1-month high on stronger euro, shares
The rupee rose to its highest in nearly a month as the euro's strength triggered dollar sales from exporters, while the seventh straight session gains in local shares also extended support.
The partially convertible rupee ended at 46.30/31 per dollar, off an intraday peak of 46.28, its strongest since May 20. It strengthened about 0.5 percent from the previous close of 46.55/56.
"A recovery in the euro lifted sentiment and restored some confidence that risk appetite is returning. A higher stock market also supported buying in the rupee," said a senior trader with a foreign bank.
"The rupee should trade in the 46.25 to 46.50 a dollar range on Thursday," he added.
The euro touched a three-week high versus the dollar on a well-covered Spanish bond auction. The Swiss franc rose against the dollar and euro as the Swiss National Bank relaxed its interventionist stance and said deflationary risks had all but disappeared.
The index of the dollar against six major currencies was down 0.4 percent.
A rise in domestic stocks also lifted sentiment. The BSE Sensex climbed 0.9 percent on Thursday, rising for the seventh straight session in its longest winning streak in 10 months.
Foreign fund flows into and out of the stock market influence the rupee's fortunes. So far in June, foreigners have bought a net $588 million worth of shares, after pulling out around $2 billion in May.
They are still net buyers of $5.2 billion so far in 2010.
One-month offshore non-deliverable forward contracts was at 46.41, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX ended at 46.3775 and 46.3825 respectively, with the total traded volume on the two exchanges at about $6.3 billion.
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