Mumbai, April 09: The rupee strengthened on Friday, bolstered by a rise in local shares, and traders said they were looking for cues from any move towards appreciation of the Chinese yuan or dollar inflows for 3G spectrum auction in India.
At 10:45 a.m. (0515 GMT), the partially convertible rupee was at 44.390/395 per dollar, stronger than Thursday’s closing of 44.46/47. “The market is basically neutral right now, looking for cues,” said Ashtosh Raina, head of forex at HDFC Bank.
While the possible yuan appreciation story will stay in the background till actual revaluation happens, dealers said, inflows for the 3G spectrum auction may happen only in the next few weeks and there was no apparent activity now.
The third-generation mobile radio spectrum auction starts from Friday, and two days after it closes a separate auction for Broadband Wireless Access will open in what would be one of the world’s biggest such auctions in recent years.
India’s main stock index was up 0.78 percent and the index of the dollar against six major currencies was down 0.02 percent.
The yen retreated against the dollar and other major currencies on Friday, cutting gains made the previous day on talk that China is likely to allow a modest appreciation in the yuan.
The one-month offshore non-deliverable forward contracts were at 44.34/44, stronger than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange were at 44.4600 and on its rival exchange MCX-SX at 44.4625.
—-Agencies