In the domestic currency futures market on the NSE, the Indian Rupee opened sharply higher at 49.18, from the previous close of 49.50 and fell immediately to 48.95 in the initial session of the trade,
Indian stock markets also posted gains on Friday with Sensex ended 440 points higher at 16,232.54 levels and Nifty ended 134 points up at 4,885.70 levels.
Green Indian Markets lured foreign capital with rupee traded higher against dollar on Friday.
Foreign fund inflows by way of Foreign Institutional Investors (FIIs) into domestic shares help the rupee. FIIs have so far, been net sellers of nearly $564 million, after having purchased a record $29.3 billion in 2010.
Dollar weakness in major markets also boosted Indian exporters to sell the greenback. The dollar index was down by nearly 0.2 per cent against major currencies.
Traders attributed the rise in Indian Rupee only to domestic stocks, and they confessed, this rise may be temporary.
The Rupee tracked the Euro and sold Dollars on belief that Euro may rise further against the Dollar after some positive news came from Europe, though Euro didn’t perform well against the Dollar as Investors waited for non-farm employment data which was supposed to release on Friday.
The index of the dollar against six major currenices was at 78.471 points.
Over in Europe, the European Central Bank (ECB) on Thursday announced two new reforms for the banks along with the Bank of England who announced second round of Quantitative Easing.