April 30, 2007	Monday	Rabi-us-Sani 12, 1428

Mixed sentiments were observed this week in the local currency market, where the rupee moved both ways versus the dollar and euro.

Increased inflows of workers remittances and improved foreign exchange reserve position helped the rupee to maintain its firmness against the American dollar and European single common currency. The demand for dollar existed but sufficient dollar supply restricted any sharp decline in rupee value during the week.

The rupee/dollar parity commenced the week on a firm note, with the rupee gaining two paisa versus the dollar in the inter bank market on buying counter and another one paisa on selling counter to trade at Rs60.66 and Rs60.68 on April 23. Balanced demand and supply of dollar helped the local currency to maintain its firm trends. The rupee ha closed last week

Firmer trend persisted on the second day of the week in review, as the rupee managed to hold its overnight levels against the dollar trading at Rs.60.66 and Rs.60.67 on April 24. The demand for dollars was slightly higher in the inter bank market on April 25. The rupee shed one paisa against the dollar, changing hands at Rs.60.67 and Rs.60.68.

Despite the heavy dollar buying the fourth day of trading, the rupee firmness over the dollar persisted. Both local and foreign banks reportedly bought nearly 50 million dollars to meet the payment requirements. However, the rupee moved up with one paisa gain and traded at Rs60.65 and Rs60.66 on April 26.

On April 27, the rupee remained firm. It further picked up one paisa and traded at Rs60.64 and Rs60.65 against the dollar on increased dollars' supply. During the week in review, the rupee/dollar parity in the inter bank market maintained a firm trend amid mild fluctuations. The rupee gained two paisa against the dollar during the week.

The rupee in the open market commenced trading on stable note, as it hold its last week's firmness and traded unchanged against the dollar at Rs60.73 and Rs60.80 on April 23. The rupee, however, dipped against the dollar on April 24, marginally shedding two paisa for buying and five paisa for selling to trade at Rs60.75 and Rs.60.85.

On April 25, the rupee managed to recover its overnight losses against the dollar, recovering five paisa and traded at Rs60.70 and Rs60.80. Due to sufficient supply of dollar, the rupee further extended its overnight gains against the dollar on April 26, as it picked up five paisa and traded at Rs60.65 and Rs60.75 in the open market.

On April 27, firmness prevailed in the open market. The rupee maintained its overnight levels against the dollar, changing hands at Rs60.65 and Rs60.75. Balanced demand and supply position of dollars helped the rupee maintained its firmness, amid increased dollar demand. This week, the rupee in the open market recovered eight paisa against the dollar on buying counter and five paisa on selling counter.

Versus the European single common currency, the rupee slid marginally against the single European currency on the first day of trading, changing hands at Rs82.17 and Rs82.27 on April 23. The rupee marginally inched up on the second day of trading. It traded at Rs82.16 and Rs82.26 against the euro on April 24. The rupee, however, gave up it steadier trend in terms of the euro on the third day of the week in review, falling sharply by 28 paisa to trade at Rs82.44 and Rs82.54 on April 25.

The local currency remained under pressure against the euro as the single European currency maintained its climb versus the major currency units in the global markets on the fourth trading day. The rupee shed 11 paisa, changing hands at Rs82.55 and Rs82.65 on April 26. On April 27, dollar's slight recovery versus the major currencies in the world markets supported the rupee in the local currency market, where it managed to gain 20 paisa over the euro, which traded at Rs82.35 and Rs82.45. However, on cumulative basis, the rupee this week lost 18 paisa against the euro.

On the international front, the dollar clawed higher against a basket of major currencies on the opening day of the week, snapping a nine-day decline, but the outlook remained negative in the near term. Against the Japanese yen, the dollar was down slightly at 118.60 yen on April 23. The euro had slipped 0.2 per cent to $1.3566, with investors taking profits after the single currency last week climbed within half a cent of its record high of $1.3670. The pound was down 0.16 percent on the day at $1.9990, some way off last week's 26-year high of $2.0133.

On April 24, the dollar fell to a two-year low against a basket of major currencies after soft data on housing and consumer confidence underscored a trend of slowing US economic growth. The dollar also dropped closer to a record low against the euro. The euro rose 0.4 per cent to a two-year high of $1.3644, creeping closer to its all-time high of $1.3670.

Against the yen, the dollar was mostly unchanged at 118.57 yen. The US dollar fell 0.7 percent against the low-yielding Swiss franc to 1.2013 francs. The Australian dollar was one of the biggest movers of the day, falling as low as $0.8234, according to Reuters data, the lowest in nearly two weeks. The pound was up around 0.3 per cent versus the dollar at $2.0042.

On April 25, the dollar fell to a record low against a trade-weighted basket of major currencies tracked by the Federal Reserve, reflecting prospects for slower US growth relative to other economies. The dollar's decline pushed the euro to as high as $1.3667, near the currency's all-time peak at $1.3670. By early afternoon, it settled at $1.3637, nearly unchanged on the day.

Against the yen, the dollar edged up 0.1 percent to trade at 118.65. One of the biggest movers on the day was the Canadian dollar, which rose to its highest since late September. The US dollar fell 0.6 per cent to C$1.1147. The pound was slightly higher on the day at $2.0041, within sight of last week's 26-year peak at $2.0133.

On April 26, the dollar rose broadly after testing near-record lows against the euro for two consecutive sessions, but sentiment remained negative ahead of US economic growth data. The yen fell broadly, hitting a record low against the euro, ahead of a Bank of Japan policy meeting. Investors took profits on the euro after it hit record highs against the yen earlier in the session. That helped push the euro lower against the dollar in the absence of fresh fundamental drivers.

The euro was down 0.3 per cent against the dollar at $1.3602 after rising as high as $1.3667 on April 25. The all-time high reached in December 2004 stands at $1.3670. The dollar rose 0.8 per cent to 119.58 yen. One of the biggest movers of the day was the New Zealand dollar, which fell sharply after the Reserve Bank of New Zealand raised interest rates by a quarter of a percent to 7.75 per cent. It last traded at US $0.7385, down one per cent.

The Canadian dollar saw volatile trading after a monetary policy report from the Bank of Canada said the slowdown in the US economy is a key threat to Canada, although comments by Governor David Dodge about inflation risks should ensure that rate cuts are not on the agenda. The US dollar was last at C$1.1210, up 0.6 percent. Sterling was up 0.6 percent on the day against the dollar at $1.9899, moving well away from last week's 26-year high of $2.0133.

At the close of the week on April 27, the yen fell to a record low against the euro after a larger-than-expected drop in Japan's core consumer prices reinforced expectations that the Bank of Japan will raise interest rates only gradually. After falling on the weak data, the yen later recouped its losses due to currency hedging by Japanese exporters ahead of Japan's "Golden Week" holidays next week, traders said.

The dollar was steady against the euro, staying away from its all-time low against the single currency, as investors awaited US economic growth data for clues about the Federal Reserve's next monetary policy move. The euro stood at $1.3601 flat on the day. The single currency had climbed as high as $1.3667 on April 25, in sight of the highest level since the single currency was introduced, on expectations for higher euro zone interest rates in coming months.

The dollar slipped to 119.40 yen compared with around 119.55 yen in late New York trading on April 26 and down from weekend’s intraday highs near 119.75 yen. Japanese markets will be closed on April 30. The euro rose as high as 162.84 yen, its peak since the single currency was first introduced in 1999, but later trimmed its gains. Sterling was up 0.4 per cent on the day at $1.9998, having fallen sharply a day earlier as the dollar gained against major rivals.