Sustained dollar selling by exporters and firm local equities today helped the Indian rupee rise by 11 paise to 46.10/11 against the US dollar amid
expectations of increased capital inflows.
The domestic unit commenced higher at 46.00/01 a dollar from its previous close and rose further to a high of 45.90, a level not seen since January 20, 2010 when it was traded at
45.80.
However, the rupee pared its initial gains in the later part of the day to end at 46.10/11 at the Interbank Foreign Exchange (Forex) market here.
Forex dealers said, continued dollar selling by exporters on hopes of further weakness in the American currency mainly supported the rupee.
Expectations of increased capital inflows after strong local equities also boosted the rupee sentiment, they added.
The Indian benchmark sensex today strengthened by another 202 points or 1.25 per cent. Asian indices too closed in the green while European market resumed higher in anticipation of
global economic recovery and better-than-expected corporate results.
In the overseas market,the US dollar declined against Euro yesterday following a slightly optimistic reading in the US housing market and
as the investors found some comfort in European officials' response to Greek debt problems.
Meanwhile, global crude oil prices were trading towards USD 78 a barrel in London today.
The Reserve Bank of India fixed the reference rate for the dollar at Rs 46.02 and for the euro at Rs 63.36.
The rupee premium for the forward dollar remained weak and ended further lower on sustained receiving by exporters.
The benchmark six-month forward dollar premium payable in July declined to 49-1/2-51-1/2 paise from 52-53 paise on Tuesday and far-forward maturing in January also closed down at 106-108 paise from 111-112 paise previously.
In cross currency trade, the domestic currency fell back against the pound and the euro while improved further against the yen.
The rupee reacted downwards against the pound to end at Rs 72.57/59 per pound from Tuesday's close of Rs 72.48/50 and also dropped against the euro to Rs 63.24/26 per euro from Rs
63.06/08 previously.
It, however, continued to rule firm and ended higher at 50.83/85 per 100 yen from its last close of Rs 51.37/39.