The Indian rupee strengthened on Wednesday as shares rallied and major currencies gained against the dollar on expectations the US Federal Reserve may not raise rates in the near future.
The rupee opened weak, in line with other Asian currencies, after the Fed paused its two-year rate raising campaign, leading to concerns that a possible US economic slowdown could hurt Indian exports, but reversed course later in the day.
The partially convertible rupee ended at 46.46/47 per dollar, higher than Tuesday's close of 46.53/54.
"The dollar's fall across the board helped the rupee. Stocks also looked good and that helped the rupee's rise," a dealer with a foreign bank said.
"The statement from China was the last straw," he said, referring to comments from the Chinese central bank that it would use foreign exchange policy to bring international payments into better balance. That raised expectations of a yuan appreciation.