Rupee hits five week high in opening trade

The Indian rupee strengthened past 82 mark to hit a five-week high against the US dollar amid continued buying from foreign investors in the local equity markets. At 9.15am, the home currency was trading at Rs 81.98 a dollar, up 0.25 percent from its previous close of Rs 82.18. The domestic currency opened at Rs 81.97 a dollar.

According to analysts, the rupee gained on the possibility of FTSE inflows. The FTSE index as well as the Sensex will see rebalancing taking place on June 16, which will result in some inflows during the session, analysts added.

India is likely to receive net inflows of around $250 million to $270 million courtesy of the FTSE rebalancing, analysts said. Since March 28, foreign investors have bought nearly $8 billion in local equities.

"Overall, the rupee is likely to trade in the consolidated range of 81.80-82.70 as negative factors would outweigh the positive factors. Ongoing rupee gains would be short-lived, and it could move back to 82.50 levels as lower premiums would push the importers to hedge their risk for the near term. Exporters should participate on any pullback in the pair," said CR Forex note.