At 10:55 pm, the partially convertible rupee was at Rs47.69/70 the dollar, compared to a peak in early Rs47.595, but still a bit stronger than its previous close of Rs47.73/74.
On Tuesday, the rupee had risen to as much as Rs47.43, its highest since June 12. "The rupee has gained as expected. It is within a range today with a slight downward bias. Rs47.50-47.80 is the range expected for the day," said Ashtosh Raina, head of foreign exchange transactions, in HDFC Bank.
Traders said the dollar's weakness against major and a positive start to the domestic market share has helped the rupee rise, but added that he would be looking out for signs in the direction of capital flows.
The dollar remained near 2009 lows against the euro and British pound on Wednesday after a U.S. housing surprisingly strong report yesterday raised hopes that the worst of the recession was over.
The dollar index, a measure of performance of U.S. units against six largest, was down 0.1%. Most Asian units were also stronger against the dollar.
Shares rose 0.9% beginning with positive economic data from the United States assistance loan, but was trading down 0.3% with caution prevailed in Asia after the recent rally.
Foreigners have so far in 2009 bought 7.6 billion U.S. dollars the value of local shares, after net sales of over $ 13 million last year.
A month offshore non-deliverable forward contracts quoted Rs47.71/81 largely unchanged from the spot rate on land, indicating a bullish outlook in the short term.
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