THE rupee moved in a tight range versus the dollar in the inter-bank market on August 15, trading at Rs59.66 and Rs59.67. Satisfactory position on the supply side matched dollar demand in the market. On August 16, the rupee/dollar parity maintained its overnight levels with the dollar changing hands at Rs59.66 and Rs59.67. An upward trend in the remittances by the overseas Pakistanis is meeting the surging demand in the market.

On August 17, the rupee was unmoved versus the dollar for buying and selling at Rs59.66 and Rs59.67 despite demand for the US currency by the importers. The inter-bank market was closed on August 18 on account of local government elections. The trading remained suspended throughout the day.

On August 19, the dollar demand was on the rise. As a result the rupee moved down gradually shedding one paisa to trade at Rs59.66 and Rs59.68. The rupee-dollar parity was under marginal pressure on increasing demand for the greenback.

Last week, the dollar traded at Rs59.66 and Rs59.67 in the inter-bank market.

In the open market, the rupee most of the time held its last week levels versus the dollar on the opening day of the week. The rupee/dollar parity maintained its level at Rs59.05 and Rs60.05. On August 16, the rupee maintained its buying level at Rs59.95 against the dollar while it shed five paisa for selling at Rs60.10 on the second day of the week in review.

Dollar strength in the international market hurt the rupee’s firmness in the local market on August 17. The rupee shed 15 paisa for buying and 10 paisa for selling, changing hands at Rs60.10 and side at Rs60.20 on the third day.

In the international market the dollar gained versus the major currencies on improved expectations about the US economic growth despite continued widening trend in the trade deficit. The galloping increase in the world oil prices was one of the leading factors behind the weakening of the rupee versus the greenback.

The open market was also closed for local government elections on August 18. On August 19, the rupee, however, sustained its overnight levels versus the dollar and traded at Rs60.10 and Rs60.20. Last week, the dollar traded at Rs59.05 and Rs60.05. This week

Versus the euro, the rupee gained 10 paisa for buying at Rs73.70. It, however, lost 10 paisa for selling to trade at Rs74.10 on August 15. The rupee, managed to recover versus the single European currency, gaining 30 paisa for buying at Rs73.40 and 10 paisa for selling at Rs74.00 on August 16.

It, however, lost 35 paisa against the euro, which traded at Rs73.35 and Rs73.65 after dollar’s recovery in the world markets on August 17. On August 19, the rupee managed to recover some of its lost ground versus the single European currency on falling euro’s demand in the international markets.

It picked up 85 paisa to change hands at Rs72.50 and Rs72.80. This week the rupee was able to gain Rs1.30 for buying and Rs1.20 for selling. The European single common currency traded last week at Rs73.80 and Rs74.00.

In the world markets, the dollar drifted lower against the major currencies on the opening day of the week in review. The dollar shed its losses as the largest than expected the US trade deficit was offset by the prospect of strong growth in the United States.

The dollar climbed against the euro on August 15, supported by a report showing increased foreign demand for US assets in June, but some investors were already placing bets the euro would push back later in the week. The euro was down 0.6 per cent at $1.2364 after having hit a 2-1/2 month high of $1.2486 last week.

Against the Swiss franc, the dollar was up 0.6 per cent at 1.2545 francs. The pound slipped 0.1 per cent to $1.8117. The dollar rose against the yen after the report but then reversed direction, falling 0.1 per cent on the day to a fresh six-week low of 109.22 yen.

The dollar’s 30 per cent decline in the three years to 2004 stemmed mainly from concerns about the ability of the United States to finance its massive current account deficit, which at $195.1 billion in the first quarter reached 6.4 per cent of gross domestic product.

On August 16, the dollar climbed against the yen but was relatively unchanged against the euro, as chart levels and stop-loss orders governed trade in a thin summertime market. The euro was at $1.2360, fighting back after being pushed below $1.23 earlier in the session. It has retraced some its gains since the end of July.

Earlier in the session, the euro tripped automatic sell orders on the way down to an intraday low of $1.2297 following the release of a larger-than-expected rise in the US consumer price index for July. The dollar managed a late-session drive to 109.66 yen, up 0.4 per cent. Against the Swiss franc the dollar was flat at 1.2540 francs.

Though the dollar added to its gains on the day against the yen, earlier it touched a seven-week low of 109.05 yen. Many analysts have a bullish near-term outlook on the yen thanks to rising optimism over Japan’s economic recovery and stellar performance of Japanese stocks, which hit four-year highs in recent weeks.

The traders took advantage of thin trading conditions to trigger automatic orders to buy euros for yen, pushing up the cross-rate from a three-week low to 135.48 yen. The weakness in the yen against the euro caused it to lose ground against the dollar.

On August 17, the dollar climbed against the yen for a third straight day after the latest batch of US inflation figures gave investors another signal the Federal Reserve will likely push ahead with more interest rate rises. The dollar was up about 0.3 per cent at 110.15 yen, bouncing back from a seven-week low at 109.05 yen hit on August 16.

The euro traded near $1.2280, slightly up from the level in the late US trade when it hit a two-week low of $1.2261. Some traders said the dollar could revert to a weak footing against the yen and the single currency in the medium term on the brighter economic outlook in Japan and Europe.

Following a steady gain earlier this year, the dollar yielded some ground against the euro in July and the first half of August. Sterling was down 0.1 per cent versus the dollar at $1.8084, after paring its earlier deep losses versus the firming US unit.

On August 18, the dollar reached a two week high against the euro, after a break of a key chart level inspired traders to load up on the US currency, which remains entrenched in a summer trading range. The euro was trading down 0.8 per cent at $1.2175 in late New York trade after touching a two-week low of $1.2158.

The dollar chalked up gains of 0.7 per cent against the Swiss franc, at 1.2707 francs. Against the yen, the dollar raised a half per cent to 110.45 yen. Even though the euro has fallen against the dollar for five consecutive days, it remains smack in the middle of a range roughly between $1.2485 and $1.1865 that it has been in for 2-1/2 months. Sterling was down 0.6 per cent at $1.7952.

At the close of the week on August 19, the dollar held gains after a five-day winning streak against a basket of major currencies, as a robust US factory survey backed views the Federal Reserve will keep raising interest rates. The dollar bought around 110.45 yen, slightly down from the level in late US trade on Thursday but still well above a seven-week low at 109.05 on August 16.

The heavy flow of foreign investment into Japanese shares in recent weeks is unsustainable, capping the yen’s upward potential in the near term, some market watchers said. The dollar has gained almost 2 per cent against a basket of six major currencies over the past five sessions.

The euro was little changed at $1.2170. That was in sight of the two-week low around $1.2160 hit on Thursday, when its fall gained momentum after breaking through the key technical level of $1.2250. Against the dollar, sterling stood at $1.7931, down 0.11 per cent on the day.