Matching flows dominated the majority of Tuesday’s session as the local currency oscillated within a tight range against the dollar albeit with a slightly bearish bias.
Supply from both corporate and interbank players just about nudged ahead of foreign currency demand to see the home unit end the day at 3660-3690 band same as the previous close.
Market chatter alludes to range-bound trading, but the domestic unit could be supported in the short-term.
The U.S. dollar was flat Tuesday as traders weighed weaker-than-expected labour data against positive remarks from Federal Reserve Chairman Jerome Powell on the economy.
The U.S. Labor Department’s latest Job Openings and Labor Turnover Survey (JOLTS) showed, a measure of labour demand, showed job openings in January fell to about 6.43 million, missing expectations of 7 million.
The pound, meanwhile, continued to climb, keeping the dollar on the back foot following data showing the U.K. economy did not contract further in the fourth quarter of the year.
The pound rose to $1.2955. The euro traded at $1.0915, with European Central Bank President Christine Lagarde adding to the chorus of calls for EU members to adopt more supporter fiscal measures, particularly from Germany, the powerhouse of the EU, which will likely underpin growth in the economic bloc and support the single currency.