The Indian rupee rose to a 1-week high against the dollar on Friday as the US Federal Reserve indicated it might pause its two-year tightening campaign in the months ahead.
The dollar slid across the board, including against Asian currencies, as markets largely expected a hawkish policy statement from the Fed and strong indications of a possible further rate rise in August.
On Thursday, the Fed raised its key rate by 25 basis points as expected and said slowing economic growth should help contain inflation.
The partially convertible rupee came off an intra-day high of 46.015 to end at 46.04/05 a dollar, 0.5 percent up from Thursday's close of 46.28/29. It hit a 22-month closing low of 46.38/39 on Monday.
"Obviously, the gains made by other currencies triggered the rupee's rise but the sustainability is still doubtful," a chief dealer at a private sector bank said.
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