Mumbai: Contrary to subdued local equities, the rupee appreciated by five paise to close at 62.41 against the American unit on dollar demand from importers and some banks on hopes of further fall in Greenback's value overseas.
Capital inflows during the week and weakness in dollar after US durable goods data sparked concerns about the pace of economic recovery in the world's largest economy also supported the rupee value.
Expectations that the US Federal Reserve will not tighten its monetary policy until the second half of the year has helped emerging market currencies like rupee gain at initial stages.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed better at 62.40 from last weekend's close of 62.46 and touched a high of 62.14 on Tuesday on sustained selling of the Greenback by banks and exporters amid foreign capital inflows.
Banks and exporters preferred to reduce their dollar position in view of good foreign capital inflows into equity market, said forex brokers, adding that the US currency's weakness has also helped the rupee sentiment.
However, the rupee later fell back on dollar demand from banks and importers, mainly oil refiners, to meet their month-end requirements to log a low of 62.81 before bouncing back to settle the week at 62.41, revealing a rise of five paise or 0.08 percent.
Last week, it had shot up by 114 paise or 1.84 percent.
The US dollar drifted lower against the euro and the yen, with investors appearing reluctant to take strong positions amid a lack of fresh market-moving news.
Crude oil prices jumped on reports that Saudi Arabian air strikes in Yemen raised concerns of supply disruptions, leading to higher dollar demand from importers, including oil firms, that kept the rise in the rupee under control.
The benchmark S&P BSE Sensex completed its three-week of losing string and was down by a massive 802.44 points, or 2.84 percent, in the week while FPIs bought shares worth USD 236.71 million on the first four days of the week, as per Sebi data.
Forward dollar premium finished lower on fresh receipts by exporters.
The benchmark six-month forward dollar premium payable in August softened further to 213.5-215.5 paise from 215-217 paise last weekend, while far-forward contract maturing in February fell back to end the week at 437.5-439.5 paise from 441-443 paise.
The RBI fixed the reference rate for the US dollar at 62.6069 and the euro at 68.1476 from last weekend's level of 62.4923 and 66.8043, respectively.
Meanwhile, the rupee reacted downwards against the pound sterling to end the week at 92.97 from 92.12 last Friday and dipped further to 67.74 per euro from 66.79 last weekend.
It also fell back to 52.32 per 100 Japanese yen from 51.59 in preceding weekend's level.
