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Rupee barely changed even as the dollar took a breather ahead of Fed Conference
The rupee ended Friday nearly flat against the dollar, which paused for breath ahead of the Federal Reserve Conference later on Friday.
Bloomberg showed the Indian currency was last changing hands at 79.8712 per dollar, compared to its previous close of 79.8837.
The greenback, though took a breather and held onto its recent gains against the euro and sterling, with the dollar index, which tracks the currency against six major peers, at 108.5, on track for a 0.38 per cent weekly gain and already up 2.5 per cent in August.
The Indian rupee eased for the third week running, as pressures from firmer oil prices and the dollar.
For the week, the domestic currency fell 0.1 per cent, having traded in a 20 paisa range over the period.
Investors will eye Fed Chair Powell’s speech at the Jackson Hole symposium at 1400 GMT for any insight into how aggressively the US central bank still plans to raise interest rates.
“The smoke signals (from the Fed) have been…’if we have to err on the side of overtightening or not doing enough, we know what side we want to be on’,” Ray Attrill, head of FX strategy at National Australia Bank, told Reuters.
“I think there’s an element of wanting to be seen to be talking tough in the hope that the tougher they talk, the less we have to do in terms of policy.”
Investors will also look to Powell to see whether his comments on the long-term outlook could prompt markets to unwind 2023 monetary easing bets, underpinning the dollar, Attrill added.
Markets are currently positioned for US rate hikes to peak this year or right at the start of 2023 and are pricing in rate cuts later that year on expectations policymakers will be more concerned about slowing growth than high inflation by then.
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