08 November 2004	Monday	24 Ramazan 1425

In the past four months of the current fiscal year, the rupee has lost nearly five per cent in terms of dollar on forward dollar-buying by importers. The rupee crossed Rs61 per dollar in the second half of October. The State Bank of Pakistan (SBP) has, since then, taken several bold steps to stabilize the rupee versus the dollar. Following central bank's measures to curb volatility, the rupee has gained around 1.5 per cent this week.

In the inter-bank market, the rupee/dollar parity began losing its value on higher dollar demand for oil import payments. As a result of corrective measures taken by the central bank recently, bullish sentiment was seen in the inter-bank market on this week's opening session. The rupee recovered 50 paisa in relation to dollar and traded at Rs60.85 and Rs60.95 on November 1.

On November 2, the rupee further extended overnight gains in the inter-bank market, picking up 30 paisa on easy availability of dollars in the market. The dollar traded at Rs60.55 and Rs60.60. However, unable to hold its firmness over its overnight level on November 3, the rupee shed 3 paisa, trading at Rs60.58 and Rs60.63 against the dollar.

On November 4, the rupee maintained its surge versus the dollar, gaining six paisa more to trade at Rs60.50 and Rs60.57. On November 5, export proceeds selling boosted the rupee value further, recovering another 28 paisa versus dollar, which traded at Rs60.25 and Rs60.29. During this week, the rupee has gained upto 60 paisa versus the dollar in the inter-bank market.

In line with the inter-bank track, the rupee managed to recover ground versus the dollar in the kerb. It gained 15 paisa on November 1, with the dollar changing hands at Rs61.65 and Rs61.75. The rupee further posted fresh gain of 75 paisa versus dollar on November 2, and traded at Rs60.90 and Rs61.00 on easy supply of the US currency.

The rupee continued its upturn in the open market and recovered another 20 paisa to trade at Rs60.70 and Rs60.80 in the open market on November 3. The rupee posted fresh gain of 15 paisa in process of trading on November 4, changing hands at Rs60.55 and Rs60.65. It managed to recover five paisa more versus the dollar changing hands at Rs60.50 and Rs60.60 on November 5. In the week the rupee managed to recover 15 paisa on the dollar in the open market.

The rupee also improved by 20 paisa gain versus euro trading at Rs78.15 and Rs78.45 on slight fall in demand and partly because of sliding value of the single European currency in world markets on November 1. On November 2, the rupee gained Rs1.40 versus the euro which changed hands at Rs76.45 and Rs76.75.

The local currency extended its winning streak versus euro on November 3, and traded at Rs76.15 and Rs76.45 in modest activity. It, however, lost 10 paisa on November 4, and traded at Rs76.55 and Rs76.85 as the single European currency held its present firmness versus the dollar. But on November 5, the rupee lost its firmness versus euro and shed 55 paisa to trade at Rs77.10 and Rs77.40.

In the world markets, the dollar showed slight gain versus leading currencies ahead of US elections, on the opening day of the week. The dollar rose on November 1, helped by lower oil prices, but with the victory of US presidential election looking highly uncertain, traders stayed away from large bets on the currency.

In New York, the euro was down about 0.2 per cent to $1.2748. But it was still roughly a cent away from last week's eight-month high around $1.2841 and in sight of February's lifetime high around $1.2930. Against the yen, the dollar was trading at 106.44 yen, up about 0.6 per cent. Sterling was down 0.2 per cent to $1.8336.

On November 2, the dollar moved slightly higher against the euro as oil prices dipped below $50 a barrel for the second consecutive day and dealers kept a wary eye on the US presidential election. The dollar gave back most of its early gains, slipping to session lows against the yen.

Analysts said the dollar, which came within a cent of its record low against the euro last week, had priced in much of this uncertainty and that market positioning has started to allow for a possible dollar bounce higher in the event of a clear result.

The euro hit eight-month highs against the dollar last week around $1.2841, within sight of lifetime highs around $1.2930 reached in February. In New York, the euro was trading around $1.2725, down about 0.2 per cent on the day. Against the yen the dollar was at 106.15 yen, down 0.3 per cent.

Sterling bounced back from recent nine-month lows against the euro and outperformed a recovering dollar after data showed British retail sales rose more than expected in October. The pound made smaller gains against the dollar at $1.8382 as investors trimmed short dollar positions ahead of the US election result.

On November 3, the dollar weakened as dealers shrugged off the relatively quick resolution to the US presidential election and turned attention back to the currency's weak fundamentals. News that Democratic Senator John Kerry was conceding the election to President George W. Bush briefly helped the dollar recoup some losses.

In New York, the euro was trading at $1.2820 up about 0.8 per cent and hovering around fresh session highs. The dollar was trading at 106.21 yen up slightly, while sterling was up 0.5 per cent at $1.8481. Sterling jumped more than half a percent to its highest in over two months against the dollar as uncertainty over the outcome of the US presidential election hit the US currency across the board.

On November 4, the dollar inched down toward record lows against the euro as traders turned away from elections to refocus on structural problems in the US economy. With the US presidential vote out of the way and few signs that European policy-makers were particularly worried about the rising euro, traders sold dollars, although not aggressively enough to push the dollar to new record lows.

In New York, the euro was trading at $1.2868 up 0.38 per cent on the day but off session highs of $1.2897, a new eight-month high that took the euro closer to all-time peaks of $1.2927 reached in February. Against the yen, the dollar was trading down 0.21 per cent at 106.03 yen. Sterling was down 0.24 per cent at $1.8438, stung by the weak UK housing data.