MUMBAI: The Indian rupee climbed to a two-month high on Monday supported by the euro's gains against the dollar and positive local shares, while corporates selling of the greenback also aided.
At 11:00 a.m. (0530 GMT), the partially convertible rupee was at 44.4900/44.4950 per dollar, after rising to 44.4450, a level last seen on May 3.
On Friday, the rupee closed at 44.5825/5925 per dollar.
"I think the overall tone should be bullish for the rupee. In the morning we've seen decent moves," a forex dealer with a foreign bank said, adding dollar inflows also supported.
Traders, however, expect the Indian unit to trade in a tight band of 44.40-44.55 during the day.
"It's a New York holiday. So don't see too much activity globally today. Rupee should be capped in a range," a trader with a private bank said.
The euro hit a one-month high against the dollar on Monday supported by diminishing worries about Greece, with stop-loss buying helping the single currency add to the hefty gains made over the past week.
The index of the dollar against six major currencies was down 0.28 percent at 74.292 points, while the euro was at $1.4518. The dollar index and the euro were at 74.461 and $1.4492 respectively at the local forex market close on Friday.
Most Asian currencies were stronger against the dollar, which supported the rupee. For a snapshot, see:
Indian shares were up 0.5 percent on Monday, after declining risks on Greece's funding boosted risk appetite.
Foreigners preferred Indian equities the most in Asia in the week to July 1 and pumped in $1.1 million, data from Nomura showed.
The one-month onshore forward premium was at 26.75 points from 24.50 at last close, the three-month was at 76 points from 75, and the one-year was at 258.25 points from 254.50.
One-month offshore non-deliverable forward contracts were quoted at 44.63, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 44.6725. The total volume was at $2.13 billion.
Copyright Reuters, 2011
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