IN THE local currency market the rupee last week traded range-bound against the dollar and euro amid slight fluctuations.
Low demand from importers and adequate inflows kept the rupee out of pressure in early trade. Strict SBP monitoring on the interbank market as well as in the open market restricted sharp rise in dollar against the rupee.
The domestic currency largely shrugged off the high volatility in stocks and rebounded sharply following a bout of dollar selling by exporters, and also aided by the greenback’s weakness against some currencies overseas in the early trading session. However, the dollar staged a solid rebound against the rupee in the open market towards the weekend trade in the face of a rise in dollar demand.
The dollar on the interbank market did not show any change against the rupee last week
On the interbank market last week, the rupee commenced the week in minus, showing minor changes after it drifted lower by one-paisa against the dollar, closing the first trading session at Rs104.85 and Rs104.86 against the last closing of Rs104.84 and Rs104.85.In the overseas trade, however, the dollar rose against the yen, approaching a three-week high, as investors unwound a surge of safe-haven trades made on the back of an attempted military coup in Turkey.
During the week, the rupee traded in narrow ranges between the high of Rs104.83/84 and the low of Rs104.85/86 against the dollar on the interbank market. Overall on week on week basis, the dollar on the interbank market did not show any change against the rupee last week amid sluggish trading activity and low dollar demand.
In the open market, the rupee continued its past two weeks steady trend and commenced the week unchanged against the dollar, trading flat at Rs105.15 and Rs105.35 due to flattish demand for dollar in the first trading session despite the fact that the dollar rose to a four-month high against a basket of major currencies in overseas trade after the release of data showing US housing starts rose more than expected in June, underpinning a theme of strength in the US economy.
In overseas market, the dollar climbed to a six-week high against safe-haven yen in Asian trade, as news of Japan’s plans for an economic stimulus package and growing expectations for the Bank of Japan (BOJ) to ease policy helped support risk sentiment.
On week on week basis, the dollar in the open market gained 25paisas against the rupee. The parity, however, traded in narrow range between the high of Rs105.40/60 and low of Rs105.15/35 last week.
Against euro, the rupee moved both ways in narrow ranges. The rupee ended the week on a positive note as it posted five-paisas gain against the euro in the last trading session at Rs115.75 and Rs116.75. During the week in review, the rupee managed to gain Rs1.15 against the euro in three sessions and at the same time posted 70paisas loss in two sessions. On week on week basis, euro lost 45paisas against the rupee last week.
Published in Dawn, Business & Finance weekly, July 25th, 2016
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