Rupee sheds 4 bps to close at 48.60 vs $
Rupee ended flat at 48.60 against dollar, a day after the Federal Reserve laid out a positive outlook for American and global economy.
By ET Bureau |
MUMBAI: The rupee ended flat on Thursday, a day after the Federal Reserve laid out a positive outlook for the American and global economy. The rupee ended at 48.60 against the dollar, four basis points weaker than Wednesday���s close.
On Tuesday, it had fallen to 48.90, its lowest since May 15. The dollar traded higher against global majors, following the Federal Reserve's FOMC meeting that left interest rates unchanged as expected, but said inflation could be undesirably low.
The dollar index that tracks the currency���s movement against six majors was down 0.4% by late evening. However, despite the Fed's statement, not everybody is positive about the economic recovery.
"Market expectations for a strong global recovery have run ahead of themselves and some degree of reassessment is ongoing," said a recent StanChart report.
"In addition, investors have trimmed their short dollar positions against Asian currencies in the past two weeks, given rising volatility and US yields," the bank said in a note to clients. Bonds traded rangebound after the Fed said it would evaluate the timing and size of purchases of securities, in light of its positive evolving outlook for the American economy. The most commonly-traded bond ��� the five-year paper ��� ended unchanged at a yield of 6.58%. The benchmark 10-year 6.05% paper saw only trades worth Rs 535 crore.
"RBI's monetary policy stance is unlikely to be influenced by the weak price data in recent weeks. It is expected to maintain a neutral stance for now, with the market even speculating that the next movement will be a rate hike," said Sherman Chan, an economist with Moody's.
On Tuesday, it had fallen to 48.90, its lowest since May 15. The dollar traded higher against global majors, following the Federal Reserve's FOMC meeting that left interest rates unchanged as expected, but said inflation could be undesirably low.
The dollar index that tracks the currency���s movement against six majors was down 0.4% by late evening. However, despite the Fed's statement, not everybody is positive about the economic recovery.
"Market expectations for a strong global recovery have run ahead of themselves and some degree of reassessment is ongoing," said a recent StanChart report.
"In addition, investors have trimmed their short dollar positions against Asian currencies in the past two weeks, given rising volatility and US yields," the bank said in a note to clients. Bonds traded rangebound after the Fed said it would evaluate the timing and size of purchases of securities, in light of its positive evolving outlook for the American economy. The most commonly-traded bond ��� the five-year paper ��� ended unchanged at a yield of 6.58%. The benchmark 10-year 6.05% paper saw only trades worth Rs 535 crore.
"RBI's monetary policy stance is unlikely to be influenced by the weak price data in recent weeks. It is expected to maintain a neutral stance for now, with the market even speculating that the next movement will be a rate hike," said Sherman Chan, an economist with Moody's.
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