DOLLARS’ buying pressure persisted in the inter-bank market on the opening day of the week. However, the rupee did not show major change versus the dollar. It remained traded at Rs59.85 and Rs59.87 on September 19. The rupee mostly held its overnight level on the following day as the market witnessed a firmer trend. The parity traded unchanged on September 20, amid balanced demand and supply position
On September 21, the rupee fluctuated moderately on increased demand for dollar. It shed two paisa versus the dollar, changing hands at Rs59.87 and Rs59.88. Earlier in the morning session, the dollar went up as high as Rs.59.90 on tight supply but the rupee soon recovered after exporters selling of dollar.
On September 22, the rupee shed one paisa only and traded versus the US dollar at Rs59.88 and Rs59.89. Slight improvement in dollars’ supply helped the rupee to gain some lost ground on September 23. The rupee recovered three paisa versus the dollar, which traded at Rs59.85 and Rs.59.86. The parity was almost unchanged over the previous week close. In the previous week, the rupee lost 11 paisa versus the dollar.
Accelerated dollars’ buying in the inter-bank market pushed the rupee value down in the open market on September 19. The rupee lost five paisa for buying and 10 paisa for selling to at Rs.60.10 and Rs60.20 versus the dollar. On September 20, the rupee/dollar parity maintained its overnight level, amid thin business.
On September 21, dollar supply eased helping the rupee to remain stable versus the US currency. The rupee traded unchanged at Rs.60.10 and Rs60.20. On September 22, the general trend in the market was soft. But the dollar’s rising demand kept the rupee under pressure. The rupee lost five paisa versus the greenback and traded at Rs60.15 and Rs60.25.
Rising demand for dollar in the inter-bank market dragged the rupee value down on September 23, as corporate sector indulged in extended buying to meet the ballooning import bill requirements. During the last two months, the import bills showed 44.27 per cent increase to $4.231 billion. The rupee drifted lower versus the dollar, shedding 10 paisa to trade at Rs60.25 and Rs.60.35. During the week in review the rupee lost 20 paisa in the open market.
The European single common currency lost ground versus the rupee on the very first day of the week helping the rupee to gain 60 paisa. The euro traded at Rs72.70 and Rs72.80 September 19, against last week’s Rs73.30 and Rs73.40. On the second day, the rupee failing to maintain its firmness lost 10 paisa versus the euro, which traded at Rs72.80 and Rs72.90.
On the third day of the week, the rupee further lost 35 paisa in terms of the euro changing hands at Rs73.15 and Rs73. On the fourth day, the rupee also further lost 10 paisa and traded at Rs73.25 and Rs73.35. The rupee, however, gained 25 paisa in relation to the euro for buying and selling at Rs.73.00 and Rs73.10 as a result of dollars’ persistent firmness in the overseas markets on the fifth day of the week in review. Over the previous week close the rupee gained 30 paisa over the euro this week.
In the world markets, the dollar posted gains versus the leading currencies. On September 19, the Japanese yen was up versus the dollar in the morning session but later the yen trimmed its gains in process of trading. The dollar also strengthened versus the euro after post-election political stalemate in Germany.
The euro weakened amid political uncertainty in Germany following closely contested election, and expectations of another dollar-supportive move up in US interest rates in the week. The euro slumped to a seven-week low against the dollar after an inconclusive German election threatened a prolonged period of uncertainty and further delayed the implementation of structural reforms in Europe’s biggest economy.
The dollar was up 0.1 percent at 111.42 yen. The euro was off 0.7 percent at $1.2151. Earlier in the day, it had fallen as low as $1.2100, a seven-week low. Sterling was down 0.2 percent at $1.8043 and the dollar was up 0.6 percent at 1.2768 Swiss francs. But while the greenback took advantage of the euro’s weakness to rise against other European currencies, it struggled against the Japanese and Canadian currencies.
On September 20, the dollar rose against the euro and the yen after the Federal Reserve increased interest rates by a quarter of a percentage point, as expected, and appeared to leave the door open to further rate hikes. The dollar was near previous day’s 7-week high against the euro, but the euro zone currency won a little respite after that slide in the wake of Germany’s indecisive election that cast doubt over the pace of reforms in Europe’s largest economy.
Against the yen the dollar rose to 111.90 yen from around 111.60 yen before the announcement and up 0.3 per cent. The euro had fallen to around $1.2124 from around $1.2160 shortly before the Fed announcement and down about 0.1 per cent from a day earlier. Against the Swiss franc, the dollar traded up 0.1 percent from 1.2804 francs. Sterling was trading down 0.2 percent at $1.7989.
On September 21, the dollar sagged as attention shifted to the growing threat Hurricane Rita posed to the battered US Gulf Coast after rally prompted by the latest United States interest rate hike fizzled. Some traders wondered if the effect of likely damage from Rita on top of the havoc already wrought by Hurricane Katrina might make the Federal Reserve pause in tightening credit.
In New York, the euro was trading up 0.8 percent against the dollar at $1.2216. A flurry of dollar buying following the Fed decision to raise rates failed to force the euro below $1.2100, a seven-week low to which the euro had slipped on September 19. The dollar was down 0.6 per cent to 111.26 yen and was down 0.9 percent to 1.2704 Swiss francs.
Sterling gained 0.6 per cent against the dollar to $1.8093 after minutes from this month’s Bank of England policy meeting revealed a unanimous vote to hold rates steady, softening expectations for a near-term rate cut.
On September 22, the dollar firmed broadly as speculation Hurricane Rita may not be as damaging as feared lent support to a currency already gaining ground on technical factors. Dealers said the modest downgrade to Rita helped push the US dollar higher against the Canadian dollar, lending the US dollar broader strength.
The euro has been on the rise against the dollar this week because of concerns over the storm. Dealers said they were not surprised to see the dollar firm a bit. But they said Rita was likely to continue to exert downward pressure on the dollar as the market frets about damage to oil facilities and how a second punishing storm could affect Federal Reserve policy. The dollar was little moved by US data.
Late in New York, the yen weathered news that Japan’s tertiary sector index of service industry activity fell a bigger-than-expected 0.8 percent in July from June. The dollar was up 0.4 percent at 111.71 yen. The euro traded at $1.2147, down 0.6 per cent. Against the Swiss currency, the dollar was up 0.7 percent at 1.2794 francs. Sterling fell more than 1 per cent to $1.7900.
At the close of the week on September 23, the yen jumped against the dollar and euro in London, after China said it was widening the daily trading band for the yuan against non-dollar currencies. But the dollar and euro later recovered some of their losses as analysts said this was a technical adjustment to China’s currency regime rather than a wholesale policy change. The dollar fell from 111.70 yen before China’s announcement to 111.02 yen, but recovered to 111.52 yen by 1144 GMT, down only slightly from the US close. The euro fell to four-day lows of 134.99 yen from around 135.50 yen and was trading close to its lows by the European mid-session, down 0.4 percent on the day. The euro benefited briefly from the dollar’s fall against the yen, hitting session highs of $1.2169 before easing to $1.2117, down 0.28 percent on the day.
Sterling fell to its lowest level in seven weeks against the dollar pushed down by a rebound in the US currency. No major UK data was released at weekend but analysts said the overall sentiment towards sterling remained weak as investors waited for signs as to whether more interest rate cuts will be needed. It traded half a percent down on the day at $1.7815 after falling to $1.7785 earlier in the session.
DOLLARS’ buying pressure persisted in the inter-bank market on the opening day of the week. However, the rupee did not show major change versus the dollar. It remained traded at Rs59.85 and Rs59.87 on September 19. The rupee mostly held its overnight level on the following day as the market witnessed a firmer trend. The parity traded unchanged on September 20, amid balanced demand and supply position
