The market will, however, have to watch out for how the dollar performs against other currencies overseas and also the amount of the redemption proceeds of the Resurgent India Bond (RIB) entering the banking system.
The rupee moved in a wide range last week. It closed on Friday at 45.3850/3950 against the dollar, a new three year high.
Dealers are attributing the inflows to bunched up supplies and the entry of redemption proceeds into the banking system.
It had closed the week before at 45.85 against the dollar. The rupee had been moving in a tight range of 45.80-85 for the previous two weeks. However, it started the month by closing at 45.5575/5675 per dollar, gaining 27 paise.
Dealers said that on Wednesday, some of the foreign banks bringing in more than $100 million into the market. On Friday, dealers said that most of the banks were selling dollars.
Even as four public sector banks were purchasing dollars at 45.46, the market could not sustain the pressure and the rupee finally ended 17 paise higher.
The movement of the rupee would depend on how the dollar moves vis-a-vis other currencies.
The dollar had been losing against other currencies like euro, yen and sterling. However, US unemployment data, which were better than expected, is likely to boost the dollar
