Mumbai: The Indian rupee climbed to its highest in two weeks on Wednesday after strong start in domestic shares buoyed hopes for inflows, but dollar demand from importers slowed the rise.
At 1040 hours (IST) the partially convertible rupee was at 48.65/66 per dollar, off a high of 48.60, its highest since January 19 and 0.3 per cent above its previous close of 48.81/82.
"It should hold in a band of 48.60 to 48.75 on Wednesday with a break beyond 48.60 taking it to 48.50," a senior dealer at a private bank said.
"The exporters would look to sell around 48.70-75, while the import buying for oil... may emerge around 48.50-55 levels," he said.
One-month offshore non-deliverable forward contracts were quoting at 48.78/88, marginally lower than the spot rate.
Indian shares were up 1.4 per cent with investors watching a US stimulus package that is close to being approved and could help revive demand in the world's largest economy.
Foreign fund flows on the stock market have been a key driver for the rupee.
The funds have pulled more than $1 billion from Indian shares this year, but a market recovery could revive inflows.
Dealers said they were also watching the dollar's performance overseas for cues. The dollar index, a gauge of the U.S. unit's performance against other major currencies, was marginally higher.
The dollar was up against a basket of currencies on Wednesday ahead of U.S. jobs data and rate decisions by the European Central Bank and Bank of England.
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