In the local currency market, the rupee this week came under strong demand pressure versus dollar and euro.
Panic dollar buying was observed throughout the week as demand for dollar and euro mounted sharply amid limited supplies.
Persistent rise in dollar demand since past week has already eroded rupee value. Analysts are now eyeing dollar at Rs98 early next week after it crossed Rs97 barrier in the open market and hovering close to Rs97 in the interbank dealings where the rupee slipped to historic lows, breaching Rs96 barrier versus dollar this week. Some analysts expect central bank intervention early next week to halt dollars’ uninterrupted rise against the rupee. However, IMF loan repayments in coming months, year-end import payments and deteriorating fiscal position may continue fueling dollar demand and exerting downward pressure on the rupee.
This week currency market review reveals that the dollar on the interbank market continued its ride versus the rupee. The rupee commenced the week on a dismal note. It suffered 10 paisa loss in the first trading session and traded against the dollar at Rs96.15 and Rs96.18 as against previous week close of Rs96.05 and Rs96.08. The rupee further extended it overnight weakness and posted five paisa loss on the buying counter and six paisa loss on the selling counter in the second trading session when dollar was seen changing hands at Rs96.20 and Rs96.24.
In the third trading session, the rupee further moved down versus dollar and slipped to Rs96.44 and Rs96.48, down 0.3 per cent or 24 paisa over previous day close. Persistent decline in the rupee for the fourth consecutive day enabled the dollar to hit all time high at Rs96.60 and Rs96.65 after the rupee posted 16 paisa decline on the buying counter and 17 paisa fall on the selling counter in the fourth trading session.
The rupee ended the week unchanged at Rs96.60 and Rs96.65 against the dollar. During the week in review, the dollar in the interbank dealings gained 0.6 per cent against the rupee.
In the open market, the rupee continues to suffer major losses, pushing dollar to all time historic highs this week. The dollar, after crossing Rs97 barrier in the week’s early sessions, now appears to be heading for a new peak at Rs98 early next week. Strong demand for dollar in the absence of sufficient supplies has given rise to panic dollar buying. As a result, the rupee slipped by 15 paisa and traded against the dollar at Rs97.00 and Rs97.20 in the week’s first trading session after closing last week at Rs96.85 and Rs97.05. The rupee further posted 10 paisa loss in the second trading session, making dollar historically expansive at Rs97.10 and Rs97.30.
The rupee downward movement versus dollar persisted for the third straight day which traded at Rs97.25 and Rs97.45 after the rupee incurred fresh loss of another 15 paisa in the third trading session. Similar trend persisted in the fourth trading session as the rupee shed 15 paisa and traded at all-time high of Rs97.45 and Rs97.65 in relation to dollar. In the last trading session, however, the rupee picked up five paisa in relation to the dollar at Rs97.40 and Rs97.60. This brings cumulative decline in the rupee value in the open market against dollar to 55 paisa in the week.
Versus the European single common currency, the rupee suffered sharp losses this week. It hit historic lows at Rs126, its lowest in past 12 months. The week commenced on a negative note as the rupee posted fresh loss of 50 paisa in the first trading session, changing hands against the euro at Rs124.50 and Rs125.50 after having closed previous week at Rs124.00 and Rs125.00 on November 23. The rupee further extended its overnight weakness and shed 20 paisa to trade against euro at Rs124.70 and Rs125.70 in the second trading session.
However, after incurring 70 paisa loss in the first two trading sessions, the rupee managed to rebound against euro in the third trading session, recovering 10 paisa at Rs124.60 and Rs125.60. But then it failed to hold its overnight firmness and continued its downslide against euro, shedding 40 paisa at Rs125.00 and Rs126.00 against euro in the fourth trading session.
The rupee continued its decline versus euro in the last trading session. It lost 40 paisa before closing the week at Rs125.40 and Rs126.40, its lowest level in the past 12 months. On week-over-week basis, the rupee depreciated by 1.1 per cent against euro after losing Rs1.40 this week.
On the international front, the euro retreated against the dollar in New York first trading session but remained within reach of recent highs at $1.2966, about 25 cents off a one-month high hit last week. The dollar was also weaker against the yen, slipping 0.4 per cent to 82.05 yen. Sterling rose against the dollar in London, climbing to $1.6032 but last traded at $1.6015, down 0.1 per cent on the day, and well below last weekend’s three-week peak of $1.6051.
On November27, the euro edged lower against the dollar. It last traded at $1.2936, down 0.3 per cent. Against the yen, the dollar rose 0.1 per cent to 82.15 yen. The dollar hit a 7-1/2-month high of 82.82 yen last week. In London, sterling hit a three-week high against the dollar at $1.6056, its highest since November 2, before paring gains and was last trading virtually flat on the day at $1.6029.
On November 28, the euro fell for a third straight session against the dollar, falling 0.1 per cent to $1.2938. Against the Japanese currency, the dollar slid 0.2 per cent to 81.96 yen, retreating from last week's 7-1/2-month high of 82.84 yen. Yen had lost about four- per cent against the dollar over the past two weeks. Sterling slipped against a firmer dollar in London, falling 0.2 per cent on the day to $1.5990.
On November 29, the euro came off a one-month high against the dollar and was up 0.2 per cent at $1.2973, after earlier hitting a one-month high of $1.3013 on Reuters data. The dollar edged 0.1 per cent higher at 82.09 yen, pulling away from a one-week low of 81.67 set on November 28. It hit a 7-1/2-month high of 82.82 yen last week. . In London, the pound was up 0.2 per cent against the dollar at $1.6036.
At the close of the week, the euro hit a five-week peak versus the dollar and was up 0.2 per cent at $1.3006, having earlier touched $1.3027, its strongest level since October 23. Against the Japanese currency, the dollar climbed 0.4 per cent to 82.48 yen, close to a near eight-month high of 82.84 yen hit last week, and up 3.4 per cent on the month.
In London, sterling was down 0.1 per cent against the dollar at $1.6018, slipping well below an earlier one-month high of $1.6062.