Rupee at 39.54 against US dollar

Ahead of three-day long week-end holidays, the rupee ended stronger by five paise at 39.54/55 against the US currency on the back of bullish equity markets and expectations of capital inflows. However, the traders expect the domestic currency to come under pressure next week as oil refiners may start dollar buying to meet their monthly payments, traders said. Sustained capital outflows at the year-end are may also weigh on the rupee sentiment.In active trade at the Interbank Foreign Exchange (forex) market today, the local currency was trapped in a range of 39.51 and 39.60 during the day after resuming firm at 39.54/55 a dollar. The rupee recovered against dollar on the back of firm equity markets and exporters'' dollar sales, dealers said. The Reserve Bank of India fixed the reference rate for the US currency at Rs 39.57 per dollar and for the single European unit at Rs 56.85 per euro. The rupee premium on forward dollar remained weak and ended lower due to sustained receivings by exporters. The benchmark six-month forward dollar premiums payable in May ended at 27 - 29 paise, slightly down from 28 - 30 paise on Wednesday and the far-forward maturing in November closed lower at 43-1/2 - 45 paise from 44-1/2 - 46-1/2 paise previously.Foreign Institutional Investors pulled out about $880 million in the initial two days of the week. In cross-currency trades, the rupee improved further against the British Sterling and the Euro while recovered against the Japanese Yen. The rupee shot up against the Sterling to end the day at Rs 78.59/61 per pound from overnight close of Rs 79.33/35 per pound and also moved up against the Single European currency to Rs 5.62/64 per euro from previous close of Rs 56.96/98 per euro. However, the Indian unit ended higher against the Japanese Yen to finish at Rs 34.95/97 per 100 yen from last close of Rs 35.04/06 per 100 yen.