Rupee opens flat at 66.82/$

The currency touched a high and low of 67.02 and 67.06 respectively. On the global front, strong employment numbers in US has reinforced the perception of a rate hike in December. Effectively, Fed Forward rate curves suggest 83% probability of 25 basis points move on the rates.

The Indian rupee opened flat at 66.82/$ in early trade on Wednesday. On the global front, strong employment numbers in US has reinforced the perception of a rate hike in December. Effectively, Fed Forward rate curves suggest 83% probability of 25 basis points move on the rates. Although December hike is a done deal, there are concerns of Fed getting aggressive if the economy shows signs of successfully absorbing the first rate hike. The real trouble is that nobody knows what exactly gradual policy normalization implies and how may rate hikes will it entail. Looking forward, US dollar is expected to gain further momentum as divergent scenario seems to be emerging, wherein Fed is turning out to be a bit hawkish, while ECB is contemplating at a prolonged accommodative stance. This entails flight of capital to a safer and high yielding currency like

On macroeconomic side, OECD reported that US, Japanese and British economies appear to be losing steam, but Chinese economy is showing signs of stabilization after a prolonged period of weakness. India's economy is also reported to be picking up.

On Tuesday, Indian rupee ended at 66.81/$, lower by 9 paise from its previous close of 66.72/$ on Monday. The currency touched a high and low of 67.02 and 67.06 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.79 and for Euro stood at 72.51 on December 08, 2015. While, the RBI’s reference rate for the Yen stood at 54.27, the reference rate for the Great Britain Pound (GBP) stood at 100.4914.