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Rupee ends lower after Yellen speech

Source : REUTERS
Last Updated: Mon, Aug 25, 2014 17:58 hrs
Rupee

The rupee fell on Monday, retreating from a three-week high hit last week, as the dollar gained after U.S. Federal Reserve chief Janet Yellen was seen as more hawkish than her European counterpart at a central bankers' meeting.

Most emerging Asian currencies eased on Monday after Yellen called for a "pragmatic" approach to U.S. monetary policy on Friday at a speech in Jackson Hole, Wyoming.

Some caution also prevailed ahead of gross domestic product data for the April-June quarter on Friday and possibly current account deficit numbers sometime this week.



However, broader sentiment remained supported by solid foreign flows into bonds and stocks. On Friday, foreign funds bought debt worth $286.69 million, and around $49.95 million in shares, official data showed.

"It is the foreign fund flows that have supported the rupee, and will continue to do so in the near term," said Surendran A. V., head of treasury at Dhanlaxmi Bank.

The partially convertible rupee closed at 60.5650/5750 per dollar compared with 60.4650/4750 in the previous session.

The falls in the rupee came after the U.S. dollar rose to a near one-year high against a basket of six-major currencies. Most Asian emerging market currencies also fell.

The rupee also faltered after the Nifty edged lower on Monday after hitting a second consecutive record high as gains in blue-chips were offset by a slump in resources firms following the top court's ruling on coal allocations.

In the offshore non-deliverable forwards, the one-month contract was at 60.89, while the three-month was at 61.45.

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