India's rupee gained on Thursday against the US dollar, buoyed by persistent gains in domestic shares and firm trend across other Asian peers, and is headed for its second successive weekly rise.
The partially-convertible Indian currency was last trading at 46.5750 to the dollar after touching a high of 46.5050 and a low of 46.6050/61. It had opened at 46.5650 compared to the previous close of 46.64.
The rupee gained 0.5% last week.
Overseas capital inflows remain healthy, fueled by India's robust economic fundamentals but further gains may be limited as some dollar demand is expected from importers.
The FIIs have already poured in US$13.4bn into Indian stocks this year on top of the more than US$17bn invested last year.
The BSE Sensex is up today for a fourth day and touched the highest level since February 2008. It was last trading at 18,750, up 83 points or 0.45% from the previous close. It earlier touched a high of 18,797 after opening at day's low of 18,669.
Asia’s third-largest economy expanded by 8.8% in the April to June quarter, the most since 2007, a government report showed on Aug. 31.
Meanwhile, the euro declined versus the dollar and the yen on speculation that European banks will struggle to raise funds amid signs that the economic recovery in the 16-nation region is slowing.
Europe’s currency weakened versus 15 of its 16 major counterparts after reports quoted European Central Bank Executive Board member Juergen Stark as saying that German banks need more capital.
Australia’s dollar rose to a four-month high against the US counterpart after a report showed today that the South Pacific nation added more jobs in August than economists forecast.