Wednesday July 23, 11:08 AM
Rupee rises to 7-wk high after govt wins vote |
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MUMBAI (Reuters) - The rupee rose to its highest in more than seven weeks on Wednesday as fears of prolonged political uncertainty eased after the government won a confidence vote, while cheaper oil boosted sentiment.
At 10.20 a.m. the partially convertible rupee was at 42.32/33 per dollar, off an early high of 42.2950 but nearly one percent stronger than Tuesday's close of 42.73/74.
Prime Minister Manmohan Singh's government won a vote of confidence in parliament on Tuesday, ensuring the survival of the ruling coalition and a civilian nuclear deal with the United States.
"The rupee is stronger primarily because of the government win yesterday and oil has also been coming down, these were two trigger points for it. Then the stocks also opened higher," said Paresh Nayar, chief dealer at Development Credit Bank.
"The rupee should stay in a band of 42.25 to 42.45 through the day," he added.
Oil , held near six-week lows on Wednesday, as worries increased over dwindling U.S. demand at the same time as fears eased Hurricane Dolly would deal a major blow to oil and gas supply.
Oil was trading around $127.5 per barrel, nearly $20 lower than record $147.27 hit earlier this month.
India's main share index opened up 3.6 percent and soon extended gains to 4.7 percent as the government's victory raised hopes stalled economic reforms would be revived.
One-month offshore non-deliverable forward contracts were quoting at 42.43/53, weaker than the onshore rate.
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