The rupee on Thursday rallied for the third straight session to end higher by 15 paise at nearly a four-and-a-half month high of 44.59/60 against the US currency on frantic buying by foreign funds in booming domestic equities amid a weak dollar overseas.

Dealers said that sustained sale of dollars by exporters and some banks on the last day of the financial year 2010-11 also aided the rupee rise.

The Bombay Stock Exchange benchmark Sensex rallied for the eighth day in a row today - the longest stretch since last April - gaining 155 points at 19,445.22, following frenzied FII buying amid firm global cues and decline in food inflation.

Foreign Institutional Investors (FIIs) picked up shares worth over $1.2 billion in seven days since March 22.

The food inflation fell to 9.5 per cent for the week ended March 19, from 10.05 per cent in the last week.

Meanwhile, at the New York Mercantile Exchange crude oil was trading at $105.26 a barrel.

Alpari (Forex) India CEO Mr Pramit Brahmbhatt said, “Rupee traded strongly throughout the day supported by a weaker dollar, positives in the stock market and strong capital inflows. The trading levels in the afternoon were the strongest levels in four-and-a-half months time.”

“The trading range for the USD/INR will be between 44.25- 44.75,” he added. At the Interbank Foreign Exchange (Forex), the local unit opened higher at 44.68/69 a dollar from previous close of 44.74/75.

It later moved in a range of 44.7250 and 44.51 before settling the day at 44.59/60, the level not seen since November 11, 2010 when it had closed at 44.31/32. The dollar index was down by about 0.4 per cent against a basket of currencies in the European market today.

The rupee premium for the forward dollar closed lower on fresh receiving by exporters. The benchmark six-month forward dollar premium payable in September finished weak at 145-147 paise from 148-149-1/2 paise yesterday.

Far-forward contracts maturing in March also settled down at 280-282 paise from 283-1/2-285-1/2 paise previously.

The Reserve Bank of India has fixed the reference rate for the dollar at Rs 44.65 and the euro at Rs 63.24.

The rupee recovered against the pound sterling to end at Rs 71.70/72 from Wednesday’s close of Rs 71.86/88 while fell further to Rs 63.41/43 per euro from Rs 63.04/06 previously.

It concluded a tad lower against the Japanese yen at 53.82/84 per 100 yen from its last close of Rs 53.81/83.

NOTE: Forex market will remain closed tomorrow, April 1, for bank’s annual closing of books of accounts

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