Mumbai, January 02: The rupee trimmed some of its early gains on Tuesday after the dollar strengthened slightly following the Australian central bank’s decision to leave interest rates unchanged.
At 10:59 a.m. (0529 GMT), the partially convertible rupee was at 46.23/24 per dollar after hitting 46.17 and stronger than its previous close of 46.37/38.
The euro fell while the dollar and yen rose after the Reserve Bank of Australia surprised markets by its interest rate move. The euro dropped from $1.3917 to $1.3890 immediately after the news.
“There are some inflows coming in due to the IPOs which may lead to further strengthening of the rupee. I expect the rupee to touch 46.10 today,” said a senior dealer at state-run Union Bank of India.
Indian developer DB Realty Ltd is raising $325 million in an initial public offering that was oversubscribed.
NTPC Ltd, India’s largest power producer, is opening a follow-on share issue on Wednesday to raise at least $1.8 billion.
Foreign investment in the share offerings will keep the rupee strong in the short term, dealers said.
“We expect the rupee to be at 46 next week due to the inflows. Currently, the market is playing just by demand-supply factors,” the Union Bank dealer said.
A rise in local shares also aided sentiment, dealers said.
The benchmark BSE stock index was trading up 0.3 percent at 0526 GMT after rising as high as 1 percent early.
—-PTI