Mumbai, Jun 7 - Continuing its ascending trend for the third day in a row, the Indian rupee today shot up by 42 paise to end below 55-mark in nearly three-week at 54.94 against the Greenback on sustained rally in local equities amid continued dollar selling by exporters.
Some sluggish trend in dollar overseas for the second day amid fresh capital inflows and expectations of more in the near term after recent stock rally also aided the rupee rise, a forex dealers said.
The rupee commenced remarkably higher at 55.14 a dollar from overnight close of 55.36 at the Interbank Foreign Exchange (Forex) market, and immediately touched a low of 55.30 a dollar on some dollar demand from importers.
However, it bounced back to breach 55-mark to a high of 54.92 before concluding at 54.94, highest closing since May 18, 2012, showing a rise of 0.76 per cent.
The Indian benchmark sensex today rallied by 194.75 points or 1.18 pct after gaining nearly 434 points or 2.71 pct yesterday.
The dollar index, a gauge of six major rivals, was down by 0.07 per cent while New York crude oil was trading above USD 86 a barrel in European market today.
Mr. Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The expectations of Fed acting towards further easing dominated the global markets and the markets continued to rise in anticipation of improved liquidity into markets injected by Fed improving global risk appetite. The cable currencies advanced to their eleven day high against USD aiding the INR to extend its strength during the day."
"The expectation of rate cut by RBI due to slowest pace of growth has also been aiding the INR to strengthen against its global peers. The Bernankes testimony due later in the evening session is the most awaited event and the Q&A after that will have some whipsaw moves," he added. PTI