The Indian rupee gained 25 paise to Rs 44.95 against the U.S. in early trade on Wednesday, snapping a six-session losing streak on fresh selling of the American currency by banks and exporters in view of dollar weakness in global markets amid a recovery in the domestic equity market.
The rupee resumed higher at Rs 45.01/02 per dollar on the Interbank Foreign Exchange, as against the last close of 45.20/21 per dollar, and moved up further to Rs 44.95 per dollar before quoting at Rs 45.00/02 per dollar at 1030 hours.
The domestic currency hovered in a range between Rs 44.95 and Rs 45.05 per dollar in morning deals.
Renewed selling of dollars by banks and exporters on the back of dollar weakness in overseas markets boosted the rupee sentiment, a forex dealer said.
In New York, the US dollar extended its retreat yesterday after the Federal Reserve spooked the markets by confirming that the economic recovery is slower than expected.
The comments also sparked more demand for safe-haven currencies, propelling the Swiss franc to a record high against the dollar.
The US central bank reaffirmed that it would hold interest rates at low levels and went a step further by adding that it will maintain a loose monetary policy “at least through mid-2013.”