The rupee on Thursday gained six paise to close at 46.95/96 against the U.S. currency on fresh dollar selling by exporters and banks amid surge in stock markets.
Dealers said exporters sold the dollar on hopes of capital inflow from foreign funds in view of firm equity markets amid weak dollar overseas.
The U.S. dollar lost ground versus most major rivals on Thursday while the beleaguered euro edged higher as investors awaited European Central Bank President Jean-Claude Trichet’s monthly news conference for more details on the central bank’s bond-buying programme.
The BSE benchmark Sensex rose by 264.19 points, or 1.59 per cent, as European shares turned positive in early trade.
Most of the Asian stocks ended higher following better- than-expected Chinese exports and assurances from Federal Reserve Chairman Ben Bernanke that the US economic recovery was on solid footing.
The rupee resumed lower at 47.05/06 a dollar against the overnight closing level of 47.01/02 per dollar. However it recovered afterwards to 46.91 per dollar before ending at 46.95/96 per dollar.
The rupee premium for the forward dollar improved further on sustained paying pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in November ended higher at 66-67-1/2 paise from 64-65 paise on Wednesday and far-forward maturing in May also closed up at 118-119-1/2 paise from 111-113 paise previously.
The Reserve Bank of India fixed the reference rate for dollar at Rs 46.98 and for the euro at Rs 56.58.
In cross currency trade, the domestic currency declined further against the pound, the euro and the Japanese yen.
The rupee dropped further against the pound to end at Rs 68.55/57 per pound from Wednesday’s close of Rs 68.17/19 and fell against the euro to Rs 56.48/50 per euro from Rs 56.27/29 previously.
It, also moved down against the yen to Rs 51.50/52 per 100 yen from its last close of Rs 51.41/43.