THE currency market lacked trading interest last week. Sessions were reduced to four due to Kashmir Day holiday on February 5. The rupee showed a firm trend against the dollar. Against euro, the local currency showed some sharp fluctuations, however.

Commencing the week in minus, the rupee shed three-paisa against the dollar in the first trading session after the dollar surged to Rs104.93 and Rs104.95 from the prior weekend level of Rs104.90 and Rs104.92 due to a marginal rise in dollar demand.

However, the rupee in the second session traded at Rs104.90 and Rs104.93 after picking up three paisas on the buying counter and two paisas on the selling counter.

Continuing upward advances, the rupee on the third day posted fresh gains of 11 paisas that pushed the dollar to a five-week low at Rs104.79 and Rs104.82.

Against euro, the local currency showed sharp fluctuations

The demand for import payments remained lacklustre due to falling international oil prices and at the same time, weakness of dollar in the overseas market and easy foreign inflows boosted the value of rupee against the dollar.

The rupee posted 25 paisas gain in the fourth trading session and closed at Rs104.55 and Rs104.57, hitting its highest level in the past seven weeks. During the week in review, the dollar in the interbank dealings lost 35 paisas in relation to the rupee on week-on-week basis.

In the open market, the rupee turned positive against the dollar after commencing the week on a negative note amid lackluster trade. Supplies were sufficient to cover demand. Leading currency dealers kept to the sidelines. The dollar traded in a narrow range between the high of Rs106.50/70 and low of Rs106.20/40. The dollar in the local market plunged to a two-week low before closing the week at Rs106.20 and Rs106.40.

During the week, the rupee gained 30 paisas in three sessions while in one session it lost 10 paisas on the buying counter and five paisas on the selling counter. On week-on-week basis, the dollar lost up to 25paisa against the rupee in the open market last week.

Against euro, the local currency showed sharp fluctuations, trading in wider range last week. It turned negative in the opening session, posting 20 paisas loss in the first trading session.

It traded at Rs116.00 and Rs117.00, down from the prior weekend’s Rs115.80 and Rs116.80 after the euro rose against the dollar in New York trading.

In the domestic market, the rupee shed Rs1.50, its biggest single day loss against euro in two months that enabled the single European currency to surge to Rs117.50 and Rs118.50, its highest level in the past 13 weeks.

During the week, the rupee suffered Rs2.20 loss in three sessions while gaining 50 paisa in one session. The euro trimmed weekly gains to Rs1.70 last week.

Published in Dawn, Business & Finance weekly, February 8th, 2016