MUMBAI (Commodity Online): The Indian rupee added further gains on Thursday, April 21, 2011 to one and a half week high, tracking extended losses in the US dollar overseas that aided gains in most of the regional currency peers as well.

Meanwhile, a decent start to the domestic benchmark indices after having surged in the previous session also cheered the domestic currency.

Rupee opened higher by around 8 paise at Rs. 44.25 per dollar but edged slightly lower, paring initial gains to an intra day low of 44.34 so far during the day as the euro was seen giving up some of its early rise. In the spot currency market, the Indian unit was last seen trading at around 44.33 at 10.30 AM IST, almost unchanged as compared to its previous sessions close.

Investors were seen renouncing the greenback as risk aversion has seemingly taken a backseat for now, helping Asian currencies gain. Market players are seeking for higher yielding currencies like euro that send the US dollar plunging to a near 15 month low versus the single currency. The US dollar is currently lower at 1.4570 versus the euro after having dropped to 1.4582, having found resistance at that level so far.

The US dollar index, which tracks the greenback against a trade-weighted basket of six major currencies, extended losses and is currently down by around 0.34% at 74.11 to its lowest level in almost three years. Among Asian currencies, the Taiwan dollar was up 0.36% at 28.90, the South Korean won 0.27% at 1079.40 and the Indonesian Rupiah by 0.28% at 8627.50 as against the US dollar.

The domestic indices edged higher in early trade extending last two days gains on firm Asian stocks. Meanwhile, foreign institutional investors (FIIs) bought Indian shares worth Rs 193 crore and domestic institutional investors (DIIs) sold shares worth Rs 23.27 crore on Wednesday, provisional data released by the stock exchanges showed.

FIIs had bought shares worth a net Rs 1836 crore from the secondary equity markets on Tuesday, the latest data showed. At the time of writing, the key benchmark BSE Sensex was higher by around 120.85 points at 19591.83 while S&P CNX Nifty was also up by around 30 points at 5881.75.

In the domestic currency futures market on the NSE, the forward month April USD/INR contract opened on Thursday at 44.30, higher than the spot market rupee. The contract hit an intra day high at 44.37 and registered a low at around 44.26 so far during the day.

At the time of writing, the NSE as well as MCX April 2011 USD/INR contract was trading at around 44.35 lower by around 2 paise or 0.05% compared to previous close at 44.37. Rupee on the contract will likely find an intra day support at 44.29.

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