Rupee remained under pressure this week against the dollar and the euro in local currency market. The rising demand for dollar by local and foreign banks to meet the payment requirements pushed the rupee down by 2 paisa in the inter-bank market on the opening day of the week, with dollar trading at Rs57.82 and Rs57.83 on September 22.

Declining trend in rupee value continued on September 23, and dollar closed at Rs57.85 and Rs57.86, after rupee shed another 3 paisa against the dollar. On September 24, rupee extended its decline against the dollar losing 3 paisa more and traded at Rs57.85 and Rs57.89. The rupee further lost one paisa on September 25, and the dollar traded at Rs57.90 amid sluggish trade. Though demand for dollar persisted on September 26, the parity remained almost stable with only one paisa decline for buying. Over the previous weekend close, the rupee showed a depreciation of 10 paisa against the dollar this week.

In kerb trading, rupee opened on a positive note and gained 5 paisa on September 22 to trade at Rs57.95 and Rs58.05 against the dollar. The central bank’s strict monitoring did not allow speculative buying in the kerb. The rupee continue its upward trend versus the dollar on September 23 gaining another 5 paisa. The dollar in the kerb traded at Rs57.95 and Rs58.0. On September 24, the parity extended losses with the rupee shedding 5 paisa for buying but 8 paisa for selling.

In the local currency market the dollar traded at Rs58.0 and Rs58.08 during the day on slight increase in demand. The rupee further lost 5 paisa for buying and 2 paisa for selling on September 25 and traded at Rs58.05 and Rs58.10. It, however, gained 2 paisa on September 26 to trade at Rs58.03 and Rs58.08 against the dollar, amid sluggish trade. At the close of the week the rupee in kerb showed 2 paisa gain for selling this week.

Against the euro, the rupee traded both ways in a narrow range. It also commenced the week on a weak note and lost 6 paisa to trade at Rs66.0 and Rs66.30 on September 22. It lost another 10 paisa on September 23 and traded at Rs66.10 and Rs66.40. the declining trend continued on September 24 when the rupee shed another 5 paisa versus the euro and traded at Rs66.15 and Rs66.35. However, the rupee managed to recover on September 25, as it gained 10 paisa making the Euro trade at Rs66.0 and Rs66.25, after reduced demand released pressure on the rupee. But it failed to hold its firmness and lost 15 paisa on September 26m closing the week at Rs66.15 and Rs66.45. Over the previous weekend level the rupee registered a fall of 75 paisa against the Euro this week.

Against other major currencies at the inter-bank forex counter, the rupee managed to recover its losses versus the Canadian and New Zealand dollars, the Danish krona and the Chinese yuan. It displayed strength versus the four currencies. However, it extended its weakness over the British pound, the Japanese yen, the Australian, Hong Kong and Singapore dollars, the Norwegian krone, the Swiss franc, the Swedish krona, the Kuwaiti dinar, the Saudi and Qatari riyals, the UAE dirham, the Malaysian ringgit, the Korean won and the Thai bhat.

In the international financial market, the dollar hit a near three-year low on September 22 against the yen after markets read a Group of Seven call for flexible exchange rate as a sign that Japan may hesitate to weaken its currency to boost exports. It also tumbled against other major currencies, sagging one per cent against the Swiss franc and falling to two-month lows against the euro. In New York, the dollar was down 1.8 per cent against the Japanese currency to 112.02 yen. Against the Swiss franc, the dollar was down 1.1 per cent to 1.3523 francs. The euro was up 0.8 per cent to $1.1471 against the dollar. Against the yen, the euro was down 1.0 per cent to 128.54 yen. The pound was up 0.8 per cent to $1.6489.

The yen, which posted massive gains last week, vaulted higher against the dollar, as did the euro, Swiss franc, sterling and the “commodity” currencies such as the Australian, and Canadian dollars. Analysts said the dollar may press lower as markets digest the G-7 statement. In early trade the dollar shed 2 per cent against the yen to notch a near-three-year low of 111.41 yen but it rose off that low as the morning unfolded. Analysts continued to cite 111.40-50 yen as near-term support.

The dollar was down three quarters of a per cent on the pound at $1.6479, though it had earlier weakened as far as $1.6503, its lowest level against sterling since early July. Sterling was a quarter per cent weaker against the euro at 69.65.

On September 23, the dollar clawed its way back to level-pegging against the yen from a three-year low hit aided by profit-taking and the lurking threat of yen-weakening interventions. The greenback mustered modest gains against the Swiss franc and the euro, marginally helped by the rising US stocks. The dollar’s late day recovery against the yen was driven by profit-taking.

It was flat against the yen at 112.23 yen more than a full cent above its earlier session low 110.93 yen. Against the Swiss franc, the dollar was up 0.4 per cent to 1.3584 francs. The euro was down 0.2 per cent against the dollar to $1.1444. Against the yen, the euro was down 0.2 per cent at 128.47 yen. Sterling was up 0.1 per cent at $1.6511.

The greenback extended its broad decline in the wake of a weekend call by the Group of Seven major industrial nations for more flexibility in exchange rates. Currency markets took the G-7 statement as a call to Japan and China to stop intentionally weakening their currencies. Subsequent dollar losses against the yen triggered a dollar slump against other key currencies, including the euro and sterling.

On September 24, the dollar wilted under the weight of the falling US stocks but stopped short of another three-year low against the yen after a top Japanese official made veiled threats of yen-weakening intervention. In the late US trading, the euro was up 0.4 per cent to $1.1493. Against the yen, the dollar fell 0.7 per cent to 111.42 yen. Against the Swiss franc, the dollar was at 1.3506 francs, down 0.5 per cent on the day. The pound was up 0.5 per cent to $1.6584.

Traders pushed the dollar to a three-year low below 111 yen earlier this week after a weekend call from the Group of Seven major industrial nations for flexibility in exchange rates. Markets read the unusually strong language of the G-7 statement as a demand that Japan and China stop intentionally weakening their currencies to protect fragile export-led economic recoveries.

On September 25, the dollar inched higher against the yen as wary traders remained on tenterhooks for potential yen-weakening intervention by Tokyo in the wake of the Japanese currency’s multi-session rally. Concerns that Japan might again sell its yen have intensified amid a string of statement from officials who insist Japan’s foreign exchange policies are unchanged. A string of the US economic data helped refocus market attention on the likelihood of a US economic recovery. The dollar weakened a touch after the government reported a surprise drop in orders for durable goods, a volatile survey, and a decline in weekly jobless claims. The greenback traded in fairly narrow ranges against its other major rivals. The dollar was nearly flat against the euro, as the European currency’s three-week gain was checked by a disappointing German business survey in New York, the euro was nearly flat on the day at $1.1500.

Against the yen, the dollar was up 0.2 per cent to 112.00 yen, after hitting three-year lows below 111 yen earlier this week. Against the Swiss franc the dollar was at 1.3423 francs, down 0.53 per cent on the day. The pound was up 0.1 per cent to $1.6610.