Rupee ends at 2 week high, weaker dollar helps

MUMBAI: The rupee rose to its highest in a fortnight on Monday, as broad dollar weakness helped sentiment for the local unit while gains in shares revived hopes for fresh capital inflows.

The partially convertible rupee ended at 48.64/65 per dollar, its strongest since Oct. 17 and gaining 1.6 percent from 49.44/46 at close on Friday.

However, the rupee has still shed about 19 percent so far in 2008 and hit a record low of 50.29 last week.

"The dollar has weakened against all major currencies and, moreover, the RBI measures to infuse liqudity helped the stock market move up," said Puneet Sharma, chief foreign exchange trader at state-run Allahabad Bank.

"The rupee may not move up much, 48.40 should hold, but the market will continue to remain very volatile. The volumes too were quite low today," he added.

The euro and other high-yielding currencies such as sterling gained against the dollar on Monday, while the yen retreated broadly as rising Asian and European equities helped to dampen extreme risk aversion.

Dealers said some exporters also sold dollars in the market on expectations the rupee may gain further in the near-term.