Rupee ended flat, Dollar extends gain vs. major currencies

Tuesday,   22-Aug-2017   05:20 PM (IST)

The Indian rupee ended the session almost flat at 64.0950/1050 levels compared to its opening at 64.09/10 levels as importers’ greenback purchases offset gains triggered by strong local shares. Caution ahead of the annual Jackson Hole Economic Policy Symposium, where global central bankers will speak later this week, also weighed on the rupee. Rupee traded in the narrow band of 64.05-64.1450 levels today. Indian shares ended with marginal gains today, as markets remained range-bound with investors keeping to the sidelines due to a lack of triggers. The benchmark BSE Sensex closed up 0.11 percent at 31,291.85. The broader NSE Nifty ended 0.11 percent higher at 9,765.55. Both the indexes recorded their first gain in three sessions. Indian government bonds fell, with the benchmark settling at a seven-week low, as a state debt auction attracted weaker-than-expected demand, while investors deferred purchases on lack of policy cues. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.78%, 4.45% and 4.41% respectively.

The dollar extended gains against the other major currencies on Tuesday, although investors remained cautious ahead of the Jackson Hole Summit due to begin on Thursday. Traders were looking ahead to this week's annual meeting of top central bankers and economists in Jackson Hole, Wyoming, where the heads of the U.S. and European central banks will be making keynote speeches. Their comments will be closely watched for fresh policy signals from the world’s two most powerful central banks. Ongoing uncertainty over the economic agenda of U.S. President Donald Trump and doubts that the Federal Reserve will deliver a third rate hike this year have fed into recent dollar weakness. However, geopolitical tensions persisted after North Korea unveiled a propaganda video of its threat to fire missiles near the U.S. territory of Guam. Pyongyang threatened the U.S. with “merciless revenge” for ignoring its warnings over annual military drills with South Korea. Data on Tuesday showed that confidence among German investors deteriorated for a third consecutive month in August.