The rupee closed almost flat against the dollar on Friday, which took a breather ahead of a Federal Reserve meeting later on Friday.
The Indian currency last changed hands at 79.8712 per dollar, compared with the previous close of 79.8837, according to Bloomberg.
The greenback held on to its recent gains against the euro and sterling, although it took a breather. The dollar index, which tracks the greenback against six major currencies, was at 108.5, up 0.38% on the week and up 2.5% now. A penny in August.
For the week, the local currency was down 0.1%, trading within a 20 paisa range during the period.
Investors will be watching Fed Chairman Jerome Powell’s speech at the Jackson Hole Symposium at 1400 GMT to see how aggressively the Fed still plans to raise interest rates.
“The smoke signal (from the Fed) has been… ‘If we have to err on the side of tightening too much or not doing enough, we know which side we want to be on’,” said Ray Attrill, head of FX strategy at National Australia Bank told Reuters.
“I think there’s a desire to be seen as a tough talker, and hopefully the tougher they talk, the less we have to do in terms of policy.”
Investors will also be watching Powell to see if his comments on the longer-term outlook will support the dollar by prompting markets to unwind bets on monetary easing in 2023, Attrill added.
Markets now expect U.S. rate hikes to peak this year or early 2023, and policymakers are expected to focus more on slowing growth than high inflation by then, leading to a rate cut later in the year.