THE rupee gained strength over the US dollar this week in the interbank and in kerb trading, also. In the interbank market the rupee traded in a narrow range amid fluctuations after opening on a slightly weak note, as the parity lost five paisa in slow trading on October 15.

There was no such activity in the marketing during the day. Most trading centers remained closed on account of strike. The dollar was seen trading at Rs62.06 and Rs62.10 on the interbank forex counter. Continued uncertainty and faring value of dollar pulled the rupee up slightly on October 16, when it gained 2 paisa over the overnight level and traded at Rs62.05 and Rs62.08 against the dollar.

However, depressed activity in the market on October 17, forced major investors on sidelines, while a good number switched to stock market which staged a surprising turnaround. Dollar came under selling pressure. The rupee failed to maintain its firmness over the US currency and lost 4 paisa on October 17.

The dollar traded at Rs62.08 and Rs62.12. The position remained unchanged on October 18, as investors waited for fresh developments on the US-Afghan war front as well as on domestic economic front. the investors hesitated malting fresh investment in the currency market. The rupee shed 3 paisa more on October 18, to trade at Rs62.10 and Rs62.15. Dullness prevailed in the market on October 19. The parity remained unchanged. There was lack of interest among currency traders. The rupee however, lost 10 paisa during the week.

Against other forex counter the rupee continued to show strength over the British pound, German mark, euro, Canadian, Australian and Singapore dollars, Swiss, French and Belgian francs, Dutch guilder, Italian lira, Austrian schilling, Danish and Norwegian krones, Swedish krona, and Spanish peseta. It lost ground versus the Japanese yen, New Zealand dollar and Qatari riyal but remained unchanged against the Saudi riyal, Hong Kong dollar, Chinese yuan, Malaysian ringgit and the UAE dirham. It continues to gain over Kuwaiti diner.

In the kerb trading, the trade remained suspended on October 15 on account of strike call given by some religious parties to protect against the US bombardment on Afghanistan. On October 16, lackluster activity in the market amid continued uncertainty and falling value of dollar helped the rupee to stage a sharp turn around gaining 60 paisa in a single day trading.

The dollar traded at Rs62.40 and Rs62.60 during the day, which saw some panic dollar selling in the open market. As a result the gap between the interbank market and open market rates narrowed to 30 paisa. This gap has remained between Rs2 and Rs3 in recent months.

The rupee did not show any change on October 17, as most investors remained in the sidelines. But on October 18, failing to maintain its firmness in the interbank market, the rupee lost up to 20 paisa against the dollar and traded at Rs62.60 and Rs62.75.

Uncertainty persisted over the outcome of the US attack on Afghanistan on October 19. Most investors remained on the sidelines waiting for some fresh developments. The dollar traded at Rs62.50 and Rs62.65. The rupee gained 10 paisa over the dollar, while during the week as a whole, the rupee gained 50 paisa over the previous weekend close.

Currently the demand for dollar is low in the kerb. Investors are waiting for fresh developments. The dollar value is falling. Activity is extremely low. Most dealers are of the opinion that the parity will move both ways for sometime in coming weeks.

The gap between the interbank and open market rates has narrowed to under 100 paisa. The parity is likely to continue to trade in a narrow range.

On the international front the dollar was a bit softer in cautious trading following reports of new anthrax cases. However, in Asian trading the dollar remained well above its US lows on October 15. The news that more Americans have been exposed to anthrax pushed the dollar lower in pre-weekend trade and many dealers in Tokyo preferred to stay in sidelines.

In Tokyo the dollar traded at 121.00 yen after 121.11 yen in the pre-week trade, but of around 120.70 on previous week’s close. The euro was holding at 91.30/35 cents compared with 91.13 cents of previous weekend close in New York. It was also well supported against the yen trading at 110.50/65 yen from 110.42 yen.

In London the pound was trapped in narrow ranges against the dollar and the euro as dealers waited fresh data on the British economy. The pound early losses against the euro were wiped out as the euro weakened against the dollar, while the market appeared waiting for this week economic data.

The pound was seen trading at $1.4491, a quarter per cent lower than in New York close on October 13, but a cent above the 5-week lows posted last week. Sterling was trading at 62.67 pence against the euro barely changed from its New York levels.

On October 16 the dollar rallied to 5-week highs against the yen in New York boosted by the stimulative US fiscal and monetary policies.

The dollar rose as high as 121.89 yen, its highest since September 11 events. The yen was dented by Japan’s admission that tax revenue will fall one trillion yen short of projections.

In Tokyo the dollar held tightly in a narrow range as many players remained off the market. The dollar held at 120.74/79 yen against 120.84 in offshore trading. Japanese selling against the yen dragged the euro lower. It stood at 109.46/52 yen versus 109.71 yen in late New York.

The pound fell a third of a cent against a broadly stronger dollar in London. It was, however, flat against the euro. At close the pound traded at $1.4440 having hit the day’s lows of $1.4425 following yet another rumour of an explosion in London. Against the euro the pound was almost unchanged from the New York close of 62.72 pence.

In New York, the buoyant dollar recovered from a sharp sell-off sparked by an anthrax scare that shut down the US congress on October 17, finding comfort from improving market sentiment about the US economy’s prospects.

Anthrax jitters cut shore early dollar rally. An early rally in the dollar stalled after reports that more than 30 congressional staffers tested positive for exposure to the potentially deadly anthrax disease, prompting the shutdown of much of the US Capitol complex in precautionary measure.

The dealers sold the dollars on anthrax news, sending the greenback within a hair of 91 cents against the euro. The dollar also retreated a full yen from overnight peaks against the Japanese currency. It found its feet again and the euro closed about 0.50 per cent lower on the day at 90.37 cents not far from lows near 90.15 cents. Against the yen, the dollar closed at 121.20 yen down a hair from the previous US close, but well below overnight peaks just shy of October 16, one-month high.

In London, the pound rose by over a quarter of a percent against a broadly weaker euro. It was trading at 62.48 pence per euro. The pound was absolutely unchanged from the New York close against the dollar at $1.4487.

On October 18, the dollar faded against the yen in Tokyo, weighed by comments from former US Treasury Secretary Robert Rubin as well as continuing concern over the effects of anthrax attacks on the US economy.

The Japan’s Ministry of Finance has intervened repeatedly to pull the dollar up from a low just under 116 yen after the attacks in September. The greenback was bid around 120.80 yen afternoon, having drifted from an intra-day high just under 121.50.

The euro dipped briefly below 90 cents, but recovered to traded sideways, ending the. afternoon around 90.34, flat with late New York levels. Against the yen, the single currency trailed to 109.28, failing once against to hold the 110 yen level it has toyed with over the past couple of weeks.