Mumbai, July 23: The rupee rose to its strongest level in a week on Friday boosted by a rise in global risk appetite after a string of strong data and expectations of bullish bank stress test results in Europe.
The partially convertible rupee closed at 46.94/95 per dollar, after rising as high as 46.89, its strongest since July 16, and 0.4 per cent stronger than Thursday’s close of 47.1250/1350. The unit still ended down 0.3 per cent on the week.
“The rupee gained quite a bit today as all are expecting good stress test results,” said Mr Ashtosh Raina, head of foreign exchange trading at HDFC Bank in Mumbai.
“The rupee’s open on Monday would depend mainly on the test results, but the INR should hold in a broad range of 46.80 - 47.50 next week,” he added.
In an effort to calm investors’ over the potential impact of the euro zone debt crisis on Europe’s banking system, regulators are assessing how 91 banks across Europe would cope with another economic downturn, and the results are expected to be published around 1600 GMT on Friday.
Dealers said the dollar’s losses against major currencies also helped the rupee. The index of the dollar against six major currencies was down 0.2 per cent.
Strong economic data boosted the euro on Friday when the German Ifo index came in above forecasts, but analysts said there were downside risks for the currency, even if the bank stress test results were benign.
Gains in domestic shares also helped the rupee. Shares are closely monitored for cues on direction of capital flows which have a huge influence on the rupee’s fortunes.