Mumbai, Aug 21 (PTI) The rupee today erased all its early strong gains and eventually ended just a paisa higher at 69.81 against the US dollar due to fag-end demand for the greenback from importers amid lacklustre local equities.
Despite a firm start, the domestic currency showed signs of fatigue and succumbed to renewed dollar pressure even as market participants stayed away from taking fresh positions ahead of a trading holiday.
The release of the latest FOMC meeting minutes and the key speech by the Fed Chair Jerome Powell at the central bank symposium in Jackson Hole also largely weighed on the forex front.
The Indian unit built on overnight positive momentum, climbed to an intra-day high of 69.53 before cooling off.
A broad-based US dollar sell-offs predominantly helped the rupee to stay afloat for the second-day after rebounding from its life-time low.
It has gained a solid 33 paise against the dollar yesterday.
Enjoying a strong recovery momentum, the rupee resumed higher at 69.69 from Monday’s close of 69.82 at the inter-bank foreign exchange (forex) market.
Taking fresh directional impetus, the local unit touched a session’s high of 69.53 before retreating sharply to hit a low of 69.92 in late afternoon deals.
However, overcoming the market volatility, it managed to settle with positive bias at 69.81, showing a mere one paisa gain.
The Financial Benchmarks India private limited (FBIL), meanwhile, fixed the reference rate for the dollar at 69.66 and for the euro at 80.24.
The 10-year benchmark bond yield also eased to 7.83 per cent.
The forex and money market will be closed tomorrow on account of the Bakr Id (Id-ul-Zuha).
On the global energy front, oil prices bounced back as the prospect of price support from US sanctions on Iran offset concerns about the outlook for demand, particularly in light of the trade dispute between Washington and Beijing.
The Brent crude futures were at USD 72.67 a barrel in early Asian trade.
Globally, the US dollar traded bearish against its major trading peers after the US President Donald Trump criticised the Fed Chair Jerome Powell for raising interest rates coupled with fading safe-haven demand, ahead of the anticipated US-China trade talks.
Against a basket of other currencies, the dollar index is down at 95.54.
In the cross currency trade, the rupee retreated sharply against the euro to end at 80.44 compared to 79.72 and fell back against the Japanese yen to finish at 63.33 per 100 yens from 63.15 yesterday.
It also drifted against British pound to close at 89.61 per pound from 89.11 earlier.
Elsewhere, the euro traded modestly higher against the greenback despite widening German-Italian yields spread led by fresh worries of crisis revival from Italy’s potential massive 80 billion euros budget spending.
The British pound, however, bounced back against the US dollar aftermath of President Trump’s desire to see lower rates amid growing concern of a no-deal Brexit.
In forward market today, premium for dollar showed a steady trend due to lack of market moving factors.
The benchmark six-month forward premium payable in December and the far-forward June 2019 contract both ended unchanged at 106-108 paise and 253-255 paise, respectively.
