The rupee today closed almost flat at 66.65 against the US dollar as currency traders restrained from taking any major positions ahead of the weekend despite positive sentiment emerging out of US Fed meet outcome.
Financial and currency markets across the globe reacted positively to US Federal Reserve’s monetary stance to keep rates on hold overnight.
Moreover, country’s current account deficit (CAD) falling substantially in the June quarter to just USD 300 million also had its impact on overall trading pattern, a forex trader commented.
The rupee opened lower at 66.69 against Thursday’s closing value of 66.66 at the Interbank Foreign Exchange (forex) market and drifted further to 66.73 on fresh demand for the American currency from importers and weak local equities.
It largely fluctuated between a high of 66.62 and a low of 66.73 throughout the day, due to uneven dollar demand and supply before ending at 66.65, revealing a mere 1 paisa gain.
The domestic currency had soared by 36 paise, its biggest single-day spike in four months, to close at a two-week high of 66.66 yesterday.
Meanwhile, the greenback staged a smart rebound against all other major currencies in the Asian session after its two-day downside momentum despite a scaling back of rate hike expectations by the Fed and sluggish US macro data outcome.
The dollar was under downward pressure following the Fed’s decision to keep its key interest rates unchanged.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.05 per cent at 95.36.
Meanwhile, the RBI fixed the reference rate for the dollar at 66.6519 and euro at 74.6701.
In cross-currency trades, the rupee recovered sharply against the pound sterling to finish at 86.39 from 87.07 and also recouped modestly against the euro to settle at 74.75 as compared to 74.89 yesterday.
It also bounced back against the Japanese yen to conclude at 66.13 from 66.22 per 100 yens earlier.