The Indian rupee rallied to its highest level in seven months on Monday as foreign investors continued to buy into both equities and debt, even as most other Asian currencies fell after surprisingly weak Chinese trade data. Strong dollar selling by custodian banks on behalf of foreign investors forced exporters to also step up their greenback sales.
However, momentum could wane in the near-term for the rupee ahead of consumer inflation and industrial output data due on Wednesday. Trade data could also be released this week, although no date has been fixed yet. "The rupee initially was caught between the US non-farm payrolls data and the Chinese trade numbers but custodian banks started selling aggressively in late trade," said Pramod Patil, head of foreign exchange and fixed income trading at United Overseas Bank.
The partially convertible rupee closed at 60.85/86 per dollar compared with 61.08/09 on Friday. The unit rose as high as 60.79, its strongest since August 12. In the offshore non-deliverable forwards, the one-month contract was at 61.23 while the three-month was at 61.89.
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