The rupee appreciated by 10 paise to close at a nearly six-week high of 60.29 against the US dollar in the previous session tracking a solid rally in local shares and continued dollar selling by exporters and some banks.
Forex dealers said besides increased selling of the American currency by exporters and banks, a higher opening in the domestic equity market and the dollar's weakness against other currencies overseas supported the rupee.
Forex dealers said besides the dollar's gains against other currencies overseas, increased demand from importers for the American unit put pressure on the rupee but a higher opening in the domestic equity market capped losses.
Forex dealers said increased selling of the American currency by exporters and banks supported the rupee but a lower opening of the domestic equity market and dollar's rise against other currencies overseas restricted the gains.
India's fiscal deficit and inflation outlook could prevent any upgrades in the country's sovereign rating, even as the economy is headed for recovery
The rupee had lost 15 paise to hit two-week closing low of 60.68 against the dollar in yesterday's trade on consistent demand for the US currency from importers and some banks on strong global cues.
Forex dealers said besides dollar's gains against other currencies, increased demand for the American unit from importers put pressure on the rupee, but a higher opening in the domestic equity market limited the losses.
The rupee had eased by five paise to close at 60.50 against the dollar in the previous session on Thursday.
Besides, a higher opening in the domestic equity market and strengthening of the euro against the dollar overseas supported the local currency, forex dealers said.
In the long run, the decision could bring clearer rules to a sector that has failed to provide India with enough power because it has been so hamstrung by confusion and scandals over concessions allegedly handed to government cronies.
De-allocation could raise import bill by $3 billion, add to coal shortage.
Sentiment remains broadly supported on strong foreign buying in Indian markets, especially in debt.
Earlier, the rupee resumed slightly lower by 60.77 as against the last closing level of 60.76 at the Interbank Foreign Exchange Market but it immediately gained strength to quote 60.69 in early trade on bouts of dollar selling by exporters.
The bank says valuations are still high, foreign mutual funds are still 'very overweight' on Indian shares.
Forex dealers said besides the dollar's gains against the euro overseas, increased demand from importers for the US currency and a lower opening in the domestic equity market also put pressure on the rupee.
On Monday, the rupee recovered from four-month low by rising 25 paise in its biggest gain in three weeks to end at 60.93 against the Greenback as shares soared ahead of the RBI's bi-monthly policy meet and exporters offloaded dollars.
The domestic currency had lost 63 paise to close at over four-month low of 61.18 against the dollar in Friday's trade on weakness in global stock markets and a strong US currency overseas.
The domestic currency had lost 49 paise to close at a three-month low of 60.55 on Thursday on capital outflows after the US Fed trimmed its monthly bond buying programme by another $10 billion.
The rupee had retreated from nearly two-week high and ended three paise lower at 60.12 against the Greenback in yesterday's trade.
Forex dealers said besides capital inflows, selling of the US currency supported the rupee but a lower opening in the domestic equity market and dollar's strength against other currencies overseas capped the gains.
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