The Indian rupee is expected to strengthen this week, possibly testing 219 cents — 220 cents per 100 rupee. Last week the rupee rose 2.1%, settling at 218.6 cents on 8 January.
The rupee appreciated against the U.S. dollar in the new year partly because of an upswing in the domestic equity markets.
Foreign institutional investors purchased $791.6 million in Indian equity last week. Part of the strength in the rupee also reflected firm U.S. dollar demand from importers.
The Indian economy has been growing at a rapid pace over the past several years and this trend is expected to continue in 2010.
This has resulted in many investors pouring money into India and other emerging market economies to get higher yields in their investments.
Source: commodityonline.com