Mumbai: The rupee ended almost flat with positive bias against the American currency on stray dollar selling by banks and exporters amid calmer market conditions.
Stretching its gains for the second straight week, the home unit settled at 66.81 against the dollar. Trading sentiment was by and large tepid as traders refrained from taking any fresh positions and anxiously awaited the outcome of the Fed Chair Janet Yellen's speech in Chicago.
A remarkably decisive outlook for a Fed rate hike at the next official FOMC meeting largely kept domestic currency under immense pressure.
But, stronger-than-expected economic activity along with robust foreign portfolio investments into the equities and export proceeds predominantly helped rupee to overcome some mid-week volatility.
The country's economy grew 7 per cent in the October-December quarter, offsetting the note ban impact. Though, optimism around the local currency eroded slightly ahead of the upcoing Federal Reserve monetary policy meeting, a forex dealer said.
At the Interbank Foreign Exchange (Forex) Market, the domestic currency opened firmly higher at 66.75 from weekend's closing value of 66.82. It strengthened further ground to touch a 3-1/2 month high of 66.6450 before retreating, capping a remarkable rebound for the currency.
The local unit drifted sharply to hit a fresh low of 66.89 briefly before settling little changed at 66.81, showing a mere gain of one paisa. Foreign funds and overseas investors turned buyers after recent selling spree and infused USD 122.26 million during the week.
The dollar index a measure of the US currency against a basket of peers ended lower at 101.35. In worldwide trade, the greenback finished modestly lower despite hawkish statement by US Federal Reserve Chair Janet Yellen overnight, which suggested a rate increase would come at the close of its two-day meeting on March 15.
