Rupee at over 1-week high as stocks gain

(Reuters) - The rupee rose to its strongest level in more than a week on Monday boosted by sharp losses in the dollar against major units and tracking gains in the domestic stock market.
By 10:10 a.m. (0440 GMT) the partially convertible rupee was at 46.58/59 per dollar, after hitting 46.56, its highest since June 3 and 0.55 percent stronger than Friday's close of 46.84/85.

"Looks like a quiet day today as well. The market is still watching the euro zone for clarity but rupee could trade in a range of 46.50-46.75 today," said Vikas Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank in Mumbai.

Dealers said the inflation data due around noon would be key for providing cues on whether the central bank would be prompted to hike rates ahead of its July 27 monetary policy.

A Reuters poll showed the wholesale price index probably rose 9.56 percent in May from a year earlier.

The performance of the stock market would also be crucial for direction as foreign fund flows influence the rupee's fortunes.

The BSE Sensex rose more than 1 percent with Reliance Industries leading the rise, taking cues from strong Asian markets.

Foreign funds have been net buyers of around $166 million of equities this month, after withdrawing nearly $2 billion in May as the euro zone's debt jitters hit risk appetite, pulling down the main index by 3.5 percent and the rupee by 4.3 percent.

Traders were also watching the dollar's moves versus majors for direction.

The index of the dollar against six major currencies was 0.6 percent lower. Most regional currencies were stronger compared to the dollar.

The euro's short-covering rally took it briefly above $1.22 to its strongest in a week on Monday, although traders were wary about driving it too far, while the Australian dollar climbed to its highest point in four weeks.

One-month offshore non-deliverable forward contracts were quoted at 46.71, 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 were at 46.6850 and 46.6825 respectively, with the total traded volume on the two exchanges at about $980 million.

Source : Reuters