Rupee appreciates further against US dollar

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The rupee on Tuesday morning moved up by two paisa to 39.26/27 against the US dollar on expectations of heavy portfolio inflows in the Reliance Power's IPO, which was fully subscribed on the first day of opening amid weak dollar overseas.

In lacklustre trade at the Interbank Foreign Exchange (Forex) market, the Indian unit opened firm at 39.26/27 per dollar against Monday's close of 39.28/29 a dollar.

Later, it moved in a very narrow range of 39.2750 and 39.2600 per dollar before being quoted at opening level of 39.26/27 a dollar in late morning deals.

The rupee is continuously getting support in anticipation of heavy capital inflows through IPO route.

Anil Ambani Group's Reliance Power IPO got fully subscribed within minutes of its book building process, which started Tuesday morning.

Dealers expected nearly USD one billion from foreign funds, supporting the rupee.

But expectations of intervention by the central bank at the rupee's higher levels might cap the surge.

In New York, the dollar declined against major rivals on Monday, worrying over the likelihood of more Federal Reserve rate cuts and further economic fallout from the US subprime mortgage mess.