The Indian rupee rose modestly on Friday, snapping a two-day fall, helped by foreign inflows into a rising stock market, but gains were capped by steady dollar purchases by oil companies, dealers said.
The partially convertible rupee ended at 46.5150/5250 against the dollar, marginally higher than the previous close of 46.53/54 and 0.07 percent firmer for the week.
"There were dollar inflows from foreign funds and cancellations in the offshore non-deliverable forward market," said a foreign exchange dealer in a corporate treasury. "Traders were also unwilling to take positions ahead of the payrolls data, so we had a dull day."
The US payrolls report for August came out after the Indian market closed and showed employers added 128,000 jobs during the month, slightly higher than market expectations. The dollar rallied after the figures and traders said this could see the rupee start on a weaker note on Monday.
The rupee has gained more than 1 percent from a three-year low of 47.04 hit in July but is still 3.1 percent down so far this year.
Foreign funds have bought more than $1 billion worth of Indian equities in August, higher than $290 million in June and $229 million in July. They have pumped about $3.5 billion into local stocks so far this year.