The dollar fell in New York market yesterday after the Federal Reserve announced a new bond-purchase programme to bolster the US economy. The central bank's steps sent US stocks much higher, reducing demand for the American currency.
Back home, the rupee resumed lower at 55.85 a dollar as against yesterday's closing level of 55.43 at the Interbank Foreign Exchange (Forex) market. However, it recovered soon to a high of 54.63 a dollar, before quoting 54.79 at 1040 hrs.
Capital inflows from foreign funds in equity markets also boosted the rupee, said a forex dealer.
The BSE 30-stock index, Sensex, was up 389 points or 2.16% at 18,408.25 (1100 hrs), in line with strong global markets and the government's move to hike diesel prices by Rs. 5 a litre to cut subsidies and reduce fiscal deficit.