Rupee up as radiation risk eases in Japan

The rupee climbed to its strongest level in more than two weeks as signs Japan's nuclear crisis is easing spurred speculation investor appetite for emerging-market assets will increase. The rupee appreciated 0.1% to 44.965 per dollar in Tuesday's trade. It rose to 44.9375 earlier, the strongest level since March 4.

The currency advanced for a third day as the Sensex rose 0.8% after the US Nuclear Regulatory Commission said on Monday that radiation-containment units at Fukushima's Dai-Ichi nuclear reactors are intact. The Dollar Index, which tracks the greenback against the currencies of six major US trading partners, fell to a 15- month low of 75.25 Tuesday.

"Fears about Japan's nuclear crisis have receded and fund flows are expected to be coming back to Asian markets," said Sudarshan Bhatt, chief currency trader at Corporation Bank in Mumbai. "The dollar has weakened significantly against most currencies." The currency may rise to 44.70 by the end of this month, Mr Bhatt predicted.

Offshore forwards indicate the rupee will trade at 45.73 to the dollar in three months, compared with expectations for a rate of 45.87 on Monday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.