October 29, 2007	Monday	Shawwal 16, 1428

In the local currency market, the rupee moved both ways in narrow band versus the dollar this week. It commenced the week on a negative note as it fell slightly against dollar in the interbank market due to strong demand for the greenback.

The rupee shed two paisa on October 22, changing hands against the dollar at Rs60.64 and Rs60.65 after closing previous week at Rs60.62 and Rs60.64. However, it managed to recover on the following day gaining one paisa in relation to dollar, which traded at Rs60.63 and Rs60.64 on October 23.

On October 24, rising demand for dollar by the importers pulled the rupee down modestly. As a result, the rupee failed to hold its firmness against dollar dropping four paisa to trade at Rs60.67 and Rs60.69. Sharp decline was observed in the rupee value on October 25, as it slid six paisa against the dollar in a single day, trading at Rs60.73 and Rs60.75. Some major banks reportedly bought nearly 80 million dollars to meet the requirements on the day.

On October 26, the rupee managed to gain three paisa against dollar, which was seen trading at Rs60.70 and Rs60.72. During the week in review, the rupee in the inter bank market remained under demand pressure against the dollar.

The local currency shed eight paisa over the past week against the American currency. Some major banks were active in buying dollars to meet their requirements this week.

In the open market, the rupee managed to hold its weekend level against the dollar, trading unchanged at Rs60.65 and Rs60.70 on the first trading day of the week in review.

Bullish trend was seen on the second trading day as the rupee managed to gain versus dollar.

The rupee in relation to dollar picked up three paisa on the buying counter and another two paisa on the selling counter, changing hands at Rs60.62 and Rs60.68.

The rupee further gained two paisa in relation to dollar on the buying counter and three paisa on the selling counter, trading at Rs60.60 and Rs60.65 on the third trading day.

On the fourth trading day of the week in review, the rupee, however, failed to keep up its rising trend versus the dollar and shed three paisa to trade at Rs60.63 and Rs60.68

Higher demand of dollar by the importers kept the rupee under pressure in the open market on the fifth day of trading with local currency losing five paisa on the buying counter and another seven paisa on the selling counter changing hands at Rs60.68 and Rs60.75 due to heavy buying of dollar by the banks. On cumulative basis, however, the rupee in the open market lost three paisa against the American currency.

Versus the European single common currency, the rupee shed 13 paisa on October 22 to trade at Rs86.25 and Rs86.35. It had closed last week at Rs86.12 and Rs86.22.

But on October 23, the rupee managed to reverse its trend versus the euro and made a sharp recovery of 77 paisa trading at Rs85.52 and Rs85.62. However, on October 24, it failed to hold its overnight advancement, shedding 29 paisa and changing hands at Rs85.90 and Rs86.00.

The rupee further lost 15 paisa in relation to euro on October 25, when it traded at Rs86.05 and Rs86.15, as the single European currency gained in terms of dollar and other major currencies in the world market.

The rupee continued its decline versus euro on October 26. It shed 55 paisa and traded at Rs86.60 and Rs86.70 as the greenback touched the low versus the single European currency. This week, the rupee lost 48 paisa against the European single common currency.

On the international front, the dollar rebounded from all-time lows on the opening day of the week as investors covered short positions on views that the currency’s recent fall might be overdone and pulled back from risky bets.

The dollar hit record lows against the euro and a basket of major currencies in overseas trade, but reversed course as growing risk aversion also encouraged further unwinding of yen-funded carry trades.

In late New York trade, the euro was down 0.9 per cent on the day at $1.4170 on October 22, having traded at a new lifetime high of $1.4348 earlier in the day, according to Reuters data, and as low as $1.4126, a spread of more than two cents on the day.

The euro posted its biggest one-day decline against the dollar since July 2006. It fell one per cent against the yen to 162.07 yen, well off last week’s 2-1/2 month peak of 167.72 yen, while the dollar was off 0.1 per cent against the Japanese currency at 114.38 yen. Sterling dropped 1 percent to $2.0322.

On October 23, the dollar slipped a day after its strongest rally against the euro in more than a year, as rebounding global stock markets rekindled investors’ appetite for risky assets.

Market attention was also focused US existing home sales report amid fears the data would point to a further deterioration in the housing market and increase the chances of more Federal Reserve interest rate cuts this year.

In late New York trade, the euro was up 0.6 percent against the dollar at $1.4262. Analysts had predicted a $1.4240 to $1.4300 trading range for the euro ahead of housing data.

The dollar rose 0.4 per cent to 114.88 yen. The euro was up one per cent at 163.84 yen, its biggest one-day percentage gain in a month. Sterling rose 1.0 per cent to $2.0510. The dollar fell 0.4 per cent against the Swiss franc to 1.1733.

On October 24, the yen rose against the dollar and euro as weaker stocks and an unexpectedly softer September US existing-home sales report caused investors to flee risky assets.

But US stocks trimmed losses on speculation that the Federal Reserve might cut the discount rate imminently, curbing the Japanese currency’s advance, which has also been driven by the unwinding of carry trades.

In late New York trade, the dollar was down 0.5 per cent at 114.20 yen, after touching a session low of 113.82 yen.

The euro was flat at $1.4262. The Australian dollar rose after data showed underlying domestic inflation rose faster than expected last quarter, increasing the chance that the country’s central bank would raise interest rates as early as November.

It last traded up 0.4 per cent at $0.9021. The New Zealand dollar traded 0.3 per cent down against the greenback at $0.7540. The dollar rose 0.2 per cent versus the Canadian dollar at C$0.9683. Sterling weakened moderately and was down 0.2 percent versus the dollar at $2.0475.

On October 25, the dollar fell near an all-time low against the euro as investors debated the size of an expected Federal Reserve interest rate cut next week after soft economic data pointed to sluggish growth.

In late New York trade, the euro was up 0.4 percent at $1.4317, edging closer to the record peak of $1.4348 hit on October 22. It climbed as high as $1.4344 in overseas trade at one point on October 25, helped by the drop in US durable goods orders.

Analysts saw the euro trading in a $1.4245-$1.4350 range for the remainder of the US trading session.

Declining US stocks, used by investors as a barometer of risk aversion, pushed the greenback lower versus the yen.

The dollar last traded 0.1 percent down at 114.01 yen, off the day’s high of 114.57 yen.

The New Zealand dollar traded 0.8 percent higher against the greenback at $0.7609, while the Australian dollar firmed 0.6 percent to $0.9074.

Sterling rose to a 3-month high of $2.0553 bolstered by soft US durable goods data.

At the close of the week on October 26, the dollar edged closer to an all-time low against the euro as poor US data on durable goods orders and new home sales the previous day reinforced expectations for a Federal Reserve rate cut next week.

The yen slipped as Asian stock markets pushed higher, warming demand for risky trades that involve selling the yen, while a jump in gold and oil prices pushed the Australian dollar to a nearly 24-year peak against the US dollar.

The euro edged up 0.1 per cent to $1.4339 holding just beneath $1.4349 struck on EBS earlier in the week - the highest since the single European currency was launched in 1999.

The dollar was little changed at 114.25 yen holding off a six-week low of 113.25 yen hit earlier this week. The Australian dollar climbed to $0.9119 the highest since mid-1984.

Sterling hit a three-month high against the dollar but fell low versus the euro as investors reckoned The pound was steady at $2.0506, having retreated from earlier three-month highs of $2.0574.