Indian rupee rises against UAE dirham as dollar weakens

The Indian rupee appreciated 14 paise to 79.77 against the US dollar (21.73 versus the UAE dirham) in early trade on Thursday tracking the overnight weakness of the American currency.

However, higher oil prices, month-end importer demand and global recession fears could restrict the gains for the rupee, forex traders said.

At the Indian interbank foreign exchange, the rupee opened at 79.80 against the American dollar, and touched 79.77 in initial deals, registering a gain of 14 paise over the last close.

On Wednesday, the rupee declined 13 paise to close at 79.91 against the US dollar.

"Rupee opened slightly stronger than Wednesday's close. The US Fed increased rates by 75 basis points and said that the aim is to bring inflation down to 2 per cent but was also a bit dovish in its approach," said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors.

Bhansali further noted that the Dow Jones and Asian indices were all up while Asian currencies also rose.

"Though the dollar index fell below 107 levels, the dollar still remains strong until it breaches the 105 level," he said.

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