The local currency market witnessed lacklustre activity in the absence of leading currency dealers’ trading interest who remained in sidelines last week.

On the interbank market, the rupee remained almost stable against the dollar, trading in tight range between Rs104.85/86 and Rs104.86/87 amid sluggish trading activities.

Commencing the week on a steady note, the rupee retained its weekend level against the dollar and traded flat at Rs104.85 and Rs104.86 in the absence of fresh triggers in the market during the first two trading sessions.

In the last trading session the rupee continued to trade flat against the dollar at Rs104.85 and Rs104.86 for the second straight day at the close of the week.

During the week in review, the dollar showed steadier trend against the rupee amid lacklustre demand and dull trading activity.

In the month of January, however, the dollar on the interbank market appreciated by 0.24pc but depreciated by 0.05pc against the rupee over January 2016.

In the open market, demand and supply of dollar remained normal and the rupee/dollar parity showed a steadier trend last week supported by the SBP move to enhance the dollar supply in open currency market.

Consequently, the rupee, after trading between Rs108.00/108.20 and Rs108.40/108.60 for almost a month, showed slight improvement against the dollar and traded in a narrow range between Rs107.20/60 and Rs107.40/80 during the week in review. Extending weekend firmness against the dollar, the rupee commenced the week in plus.

The rupee further weakened against the dollar in the fourth trading session after slight pickup in dollar demand from private sector buyer and general public that enabled the dollar to climb to Rs107.40 and Rs107.70, a level last seen on Dec 2 last year, after the rupee suffered 10-paisa loss for the second day in a row.

The week ended on a stable note as the parity remained inert in the last trading session. The rupee did not show any change against the dollar and continued to trade flat at Rs107.40 and Rs107.70 for the second successive day after the greenback in the international trade climbed for two straight days, pulling back from seven-week lows against a basket of currencies on the view that President Donald Trump would deliver on his campaign promise to put policies in place to further bolster an economy that has improved but has sputtered at times.

During the week in review, the dollar in the open market, however, managed to gain 20paisa against the rupee.

Against euro, the rupee turned negative last week after snapping previous weekend winning streak and showed a falling trend in the first four trading sessions.

Commencing the week in minus, the rupee downslide persisted against euro for three consecutive days as it posted 50paisa loss against euro which surged to its highest level at Rs115.25 and Rs116.75 in almost three and a half months in the third trading session.

The rupee ended the week on a happy note as it staged a rebound against the euro in the last trading session and posted 30paisa gain after losing Rs1.20 against the euro in the first four trading sessions, closing the week at Rs115.00 and Rs116.50.

During the week, however, euro appreciated against the rupee by 90paisa on week on week basis, hovering between the high of Rs115.30/Rs116.80 and low of Rs114.50/Rs116.00.

In January, the rupee has depreciated by 1.9pc against the euro but appreciated by 0.7pc over January 2016.

Published in Dawn, Business & Finance weekly, January 30th, 2017