Monday, November 29, 1999

Rupee strengthens to 1-month high on weak dollar

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The rupee rose to its highest in nearly a month on Friday, despite a fall in local shares, as the dollar's weakness overseas triggered selling in the U.S. currency by exporters.The partially convertible rupee ended at 46.16/17 per dollar, off an early peak of 46.0950, its strongest since May 19 and about 0.3 percent stronger than its 46.30/31 close on Thursday."The comfort that the euro crisis is slowly being taken care of triggered the rupee's rise," said R.V.S. Sridhar, president and head of global markets at Axis Bank, adding he expects the rupee to trade in a wide band of 45.90 to 46.25 a dollar on Monday.The dollar fell to a one-month low versus the Swiss franc on Friday on broad strength in the Swiss currency, a day after the Swiss National Bank stepped back from its interventionist stance. The euro stayed near three-week highs against the dollar.The index of the dollar against six major currencies was mostly flat at the close of local trading session.A fall in local shares limited the rupee's gains. The BSE Sensex snapped a seven-day winning streak to end 0.3 percent lower.Foreign fund flows into and out of the stock market influence the rupee's fortunes. So far in June, foreigners have bought a net $773 million worth of shares, after pulling out around $2 billion in May.One-month offshore non-deliverable forward contracts was at 46.34, 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 46.2025 and 46.20 respectively, with total volume at $6.3 billion.(Editing by Malini Menon)(For more business news on Reuters India click
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