The rupee/dollar parity in the local currency market failed to maintain its firmness and assumed a downward trend. Though, the rupee started the week on a firm note in interbank market showing no change versus the dollar over the previous week close of Rs57.35 and Rs57.36
, it followed a marginal falling trend later in the week.
Steady supply of dollars and short demand by corporate sector helped the rupee to sustain its levels on March 8, but then the rupee shed three paisas against the dollar on March 9, and was traded at Rs57.38 and Rs57.40.
Some increasing demand for dollars by the corporate sector pushed the rupee-dollar parity down further on March 10, when the dollar was seen changing hands for Rs57.41 and Rs57.43. The rupee slipped modestly versus the dollar on persistent demand by both foreign and local banks.
On March 11, the rupee continued its downward revision versus the dollar and shed four paisas to trade at Rs57.45 and Rs57.47. Banks bought nearly $35-40 million for payment requirements.
Continued demand for dollar in the inter-bank market exerted increased pressure on the rupee, which down further on March 12, shedding two paisas against the dollar, which was quoted at Rs57.47 and Rs57.49. At the close of the week, the rupee registered a cumulative loss of nearly 13 paisas over the previous weekend close.
In line with the inter-bank market, rising trend was witnessed in kerb trading on the week's opening day as the rupee posted two paisas gain trading at Rs57.45 and Rs57.55 against the dollar. On March 9, the rupee declined marginally, shedding five paisas in relation to the dollar.
It changed hands at Rs57.50 and Rs57.60 on increasing corporate demand due to some payments, which pushed the rates down in the local currency market. On March 10, the rupee firmly held its previous levels for selling at Rs57.60 but lost three paisas for buying, changing hands at Rs57.53 versus the dollar.
On March 11, the rupee remained under pressure as banks purchased dollars from the open market. It tumbled with modest loss of five paisas in terms of the dollar and traded at Rs57.60 and Rs57.65.
The parity continued its downtrend on March 12, with the rupee shedding another five paisas versus the dollar, which was quoted at Rs57.65 and Rs57.70 at close. In the week, the rupee lost 18 paisas for buying as compared to previous weekend close against the dollar. It lost 13 paisas for selling.
The rupee, however, remained fluctuated against the euro. On March 8, the local currency gained seven paisas and traded at Rs71.06 and Rs71.36. But on the following day, the rupee lost 38 paisas versus the euro. It traded at Rs71.44 and Rs71.74. On March 10, in response to the falling trend of euro in world markets, the rupee recovered nearly 70 paisas in terms of the single European currency and changed hands for Rs70.73 and Rs71.03.
It managed to maintain its rising trend versus the euro on March 11, gaining 44 paisas at Rs70.16 and Rs70.46. However, failing to maintain its overnight firmness, the rupee lost 41 paisas on March 12, changing hands at Rs70.57 and Rs70.87. At this level the rupee still managed to recover 56 paisas against the euro in the week.
Against other major currencies at the inter bank forex counter, the rupee showed strength over the British pound, the Canadian, Australian and New Zealand dollars, the Swiss franc, the Danish krone, the Swedish karona and the South Korean won.
It, however, lost further ground versus the Japanese yen, the Hong Kong and Singapore dollars, the Chinese yuan, the Malaysian ringgit, the Thai bhat, the Norwegian krone, the Kuwaiti dinar, the Saudi and Qatari riyals and the UAE dirham.
Reuters daily reports on international financial markets revealed the dollar retreated against the yen and euro on March 8, amid market rumours that Japan had withdrawn its offer to buy the greenback after suspected heavy dollar-buying intervention earlier in the day.
But traders expect the Bank of Japan, which acts on behalf of the ministry of finance, to continue its intervention in the next few days, ahead of the Japanese fiscal year end on March 31, as the Japanese companies repatriate earnings from abroad. A weaker yen helps boost corporate results. The BoJ action triggered a massive stop-loss order below 112 yen, which sent the dollar sharply lower.
In late New York trade, the euro traded at $1.2401 up 0.23 per cent, rising as high as $1.2415 in a knee jerk reaction to the dollar's fall against the yen. Against the Japanese currency, the euro fell close to 0.6 per cent to 137.90 yen. The dollar was off 0.8 per cent versus the yen at 111.16 yen after rising to a five-month high of around 112.32 yen. The US currency fell 0.17 per cent against the Swiss franc to 1.2740 francs. Sterling rose against the dollar to $1.8496.
Earlier, there was demand for dollars against the yen from the Japanese and the US commercial banks. But the dollar's tone remains "defensive" in light of the "very disappointing" February employment report, which showed that the US economy created just 21,000 jobs, far fewer than market expectations of 125,000.
The dollar, meanwhile, reacted little to comments from the US treasury Secretary who said the economy remains unusually sound. In London, sterling held firm against the dollar consolidating the previous week end surge following a weak US jobs report, but it struggled to maintain upward momentum awaiting fresh market-moving leads.
The pound had surged over three cents at the end of last week as a much lower-than-expected 21,000 rise in the US payrolls hammered the dollar across-the-board. It traded at $1.8490 to the dollar, marginally firmer on the session, but peeling back from an earlier one-week high of $ $1.8545. It was steady against the euro at 66.97 pence.
On March 9, the dollar rallied against major currencies in volatile trade drawing support from suspected Bank of Japan intervention to weaken the yen against the greenback.
The dollar fell briefly against the yen as traders again cited the BoJ withdrawing its offer to buy dollars, dragging the US currency down to 110.25 yen from 111.17 in early trade. The euro traded down close to 0.8 per cent at $1.2302 after rising to about $1.2461 in Europe. Last week, the euro hit three-month lows around 41.2056.
In February, it hit record highs above $1.2900. The dollar had a late surge against the euro, with some traders citing buying by Japanese banks around 111.15 yen as one of the catalysts. Against the yen, the dollar rose 0.2 per cent to 111.41 yen, after falling as low as 110.25.
Sterling lost 1-1/2 cents against the dollar and tumbled to a two-week low versus the euro in London after disappointing British trade and manufacturing output data raised concerns about domestic growth. The goods trade deficit widened to a record 5.6 billion pounds in January as exports to the United State plunged by 30 per cent, hit by the strength of the pound against the dollar.
Sterling had fallen to a low of $1.8332 before recovering to 41.8374. Earlier in the day before the data it hit a one-week high of 41.8586 as the dollar fell across the board.
Against the euro it hit a two-week low of 67.55 pence, down half a per cent from late New York levels on March 8. The pound, buoyed by higher interest rates and the relatively upbeat economy, rose almost 20 per cent against the dollar over the past year, hitting a 11-year high of $1.9140 in February.
The dollar strengthened against some major currencies on March 10, in a technically driven session as investors took profits on other currencies. In New York, the euro was down sharply against the yen at 135.50 yen. Against the dollar, the euro fell 0.7 per cent to $1.2231.
The euro has shed about seven cents since hitting record highs against the dollar above $1.2900 in mid-February. Against the yen, however, the dollar was down about 0.4 per cent to 110.78 yen.
Investors remained on alert for yen-selling intervention by Japanese monetary authorities, although an unexpected downward revision in Japan's growth data for October-December alleviated pressure on the yen.
