Rupee Opens Almost Flat Ahead Of Key Fed Conference

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Rupee opens nearly flat ahead of Fed conference later on Friday

The rupee opened almost flat against the dollar on Friday, ahead of the Federal Reserve’s Jackson Hole conference later in the day, even as the dollar held onto recent gains.

The rupee opened at 79.8625 compared to Thursday’s close of 79.8837, according to Bloomberg.

Similarly, in the previous three sessions too, the rupee had opened barely changed.

PTI reported that at the interbank foreign exchange, the domestic unit opened at 79.87 against the dollar and inched higher to touch 79.86, registering a gain of 6 paise over its previous close.

In the previous session, the rupee declined by 6 paise to close at 79.92 against the American currency, according to PTI.

The realised volatility on the local currency, measured in terms of the daily close-to-close over last 10 days, has dropped to a one-month low, according to Reuters.

The overnight risk “has simply disappeared” as it looks like that traders “have little appetite” right now to take the rupee below 80, a spot currency dealer at a Mumbai-based bank, told Reuters.

“We think the balance of risks remains loaded in favour of a sizeable move lower below 80 for the rupee. Powell’s speech today could be the trigger.”

Forex traders said, the rupee is expected to witness range-bound trade this Friday, as investors await Federal Reserve Chairman Jerome Powell’s speech for further clues about the pace of the US central bank’s rate hikes, according to PTI.

“Higher oil prices and a weak start in the Asian and emerging market peers could keep appreciating bias capped,” Sriram Iyer, Senior Research Analyst at Reliance Securities, told PTI, adding that markets could remain range bound ahead of the monthly August futures expiry as well.

While risk appetite was generally positive on Friday, Asian currencies traded in a varied manner. After the S&P 500 index gained 1.4 per cent overnight in its highest day in over two weeks, equity gauges increased in the region.

Domestic equities rallied sharply on Friday, with the Sensex up over 400 points.

On Friday, the dollar’s recent advances against the euro and the pound continued. Early Asian trading saw the euro at $0.9966 after multiple attempts this week to break back over parity against the dollar failed. On Monday, it declined below that critical psychological level.

The dollar index, which compares the value of the dollar to that of six major peers, is now at 108.53, up 2.5 per cent for the month of August and on track to rise by 0.38 per cent this week.

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