Rupee ends flat at 67.06 vs USD; US Fed speech in focus

Mumbai, Aug 26 (PTI) The rupee settled almost flat at67.06 against the US currency in restricted activity ahead ofthe US central bank’s speech. Overall mood remained fragile and fully focused on FederalReserve Chair Janet Yellen’s speech at Jackson Hole symposiumlater in the day, which is expected to give some clues on thefuture path of US rate hikes. Reflecting nervousness over the prospect of the FederalReserve tightening policy and event risk, traders stayed onthe sidelines, a dealer said. The domestic currency opened modestly higher at 67.02 adollar compared to Thursday’s closing level of 67.05 at theInterbank Foreign Exchange (Forex) market and struggled tomake any headway. It largely traded in a very tight range of 66.98 and67.0750 due to alternate bouts of demand and supplytransactions of dollars, before settling at 67.06, down by amere one paisa. The rupee had ended higher by 6 paise at 67.05 againstthe greenback yesterday. Meanwhile, RBI yesterday announced a slew of of changes infixed income and currency markets such as allowing lenders toissue ‘masala bonds’ and to accept corporate bonds under theliquidity adjustment facility (LAF). The RBI fixed the reference rate for the dollar at 67.0299and for euro at 75.7371. In cross-currency trades, the rupee drifted back againstthe pound sterling to close at 88.53 from 88.46 and declinedfurther against the euro to end at 75.71 compared to 75.68earlier. It also softened against the Japanese yen to 66.75 from66.74 per 100 yens. Meanwhile, stock markets remained under selling pressurefor the second-straight session. The BSE Sensex dropped 53.66points to close at 27,782.25 while the broader Nifty fell19.65 points to end at 8,572.55. In the forward market, premium for dollar continued totrade weak on sustained receipts by exporters. The benchmark six-month premium for January slipped to166-168 paise from 169.5-171 paise and the forward July 2017contract also dropped to 360-362 paise from 366.5-368 paiseyesterday. On the global front, US dollar traded lower againstthe other major currencies as investors turned cautious beforethe keynote speech by Yellen. The US dollar index was down0.08 per cent at 94.60 in early trade. PTI EDM RHBMR