The Indian rupee strengthened on Friday on continued foreign fund inflows into domestic shares,but month-end US dollar demand from oil companies limited further gains.
Foreign fund inflows into the domestic debt and equity markets have totalled over $3.5 billion so far in December,helping the rupee notch its second consecutive weekly gain.
Traders said the market will continue to monitor the dollar’s moves against global currencies next week in the absence of any key domestic trigger.
Traders expect the Indian rupee to move in a 61.50 to 62.60 per dollar range next week.
“I think broadly we will have to wait for trigger news and only one is in sight,which is inflation on the domestic front. You never know about the global markets though,” said Paresh Nayar,head of fixed income and currencies at First Rand Bank.
December inflation data,which will be key for the market to cement views on the future course of monetary action,is due only in mid-January.
The partially convertible rupee closed at 61.85/86 per dollar compared with 62.16/17 on Thursday. The unit gained 0.3 percent on the week.
Indian shares rose on Friday,sending indexes to their second consecutive weekly gains,as technology stocks such as Infosys extended a rally this year after data continued to signal a sturdier U.S. economy.
In the offshore non-deliverable forwards,the one-month contract was at 62.31,while the three-month was at 63.11.
* Rupee ends at 61.85/86 per US dollar vs 62.16/17 on Thurs
* Indian rupee gains 0.3 pct on week,up for second straight week
* Indian rupee seen in a 61.50 to 62.60 range next week-traders
FACTORS TO WATCH
* Euro lifted as banks look to shore up balance sheets
* Won leads Asia FX gains,regional outlook still dark
* Shares extend rally as yen sinks
* Foreign institutional investor flows
* For data on currency futures