The rupee rose to its highest in a week on Friday, as risk aversion over the euro zone debt crisis receded, bolstering dollar supplies from local exporters while a rally in domestic shares aided sentiment.
The partially convertible rupee ended at 46.35/36 per dollar, off an intraday peak of 46.32, its strongest since May 20, and more than 2 percent stronger than Wednesday's close of 47.29/30. It rose 1.3 percent on the week.
The market was closed on Thursday for a local holiday.
The euro gained on month-end fixing demand for euros and ahead of a long weekend in both the U.S. and U.K. markets. The dollar index against six majors was down about 0.1 percent.
"The euro's rise led to dollar selling from exporters from the beginning of trade. The undertone is bullish and I see a range of 46.20 to 46.50 for Monday," said a dealer with a foreign bank.
Traders said a rise in domestic share prices also supported sentiment.
The benchmark BSE (^BSESN : 16863.06 +196.66) share index posted its biggest weekly gain since early March, as it rose 1.2 percent on the day, tracking a rally in global markets and China's assurance that Europe will remain a major investment market.
The People's Bank of China said a Financial Times report that the State Administration of Foreign Exchange (SAFE) was concerned about its exposure to euro zone debt was groundless, lifting world stocks.
One-month offshore non-deliverable forward contracts were quoted at 46.46, weaker than the onshore spot rate.
In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange (^NSEI : 5066.55 +63.45) and MCX-SX ended at 46.5050 and 46.51 respectively, with the total traded volume on the two exchanges at about $7.8 billion.
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