The rupee maintained a firmed trend versus the American and European single common currencies in the local currency market this week.

The rupee commenced the week on a happy note. It gained three paisa against dollar on buying counter and another two paisa on selling counter to trade at Rs60.67 and Rs60.69 in the inter bank market on the opening day of the week in review. The rupee had closed last week at Rs60.70 and Rs60.72. However, it lost its overnight firmness on the second day of trading due to sharp increase in demand for dollars by the importers.

Strong importers demand for dollars on October 2, pressured the rupee to shed 11 paisa in a single day slide against the dollar, which traded at Rs60.75 and Rs60.78. On October 3, the rupee managed to recover four paisa against dollar in the interbank market to trade at Rs60.72 and Rs60.74. Improved dollar supply supported the rupee to regain its lost ground. On October 4, the rupee held its overnight levels against dollar in the interbank market to trade at Rs60.72 and Rs60.74 on easy inflows of dollars. Different banks reportedly bought nearly 80-90 million dollars to meet the market demand.

Slight increase was observed in the interbank market on October 5, as the rupee managed to recover one paisa against the dollar changing hands at Rs60.71 and Rs60.73. Despite increasing demand for dollars from importers, the rupee resisted any sharp fall versus the dollar supported by significant increase in remittances inflows. During the week in review, the rupee in the inter bank market maintained a firm trend versus the US currency. It shed four paisa over the opening week’s levels of Rs60.67 and Rs60.69.

In the open market, the rupee managed to retain its weekend gains against dollar and traded at Rs60.65 and Rs60.70 on October 1. It retained its overnight levels against dollar changing hands at Rs60.65 and Rs60.70 on October 2. On October 3, however, the rupee managed to gain five paisa against dollar, which traded at Rs60.60 and Rs60.65. The rupee maintained its overnight levels against dollar, trading unchanged at Rs60.60 and Rs60.65 on October 4. The rupee maintained its overnight levels against the dollar for the second day in a row and traded unchanged at Rs60.60 and Rs60.65 on October 5. This week, the rupee in the open market maintained a stable trend versus the American currency.

Versus the single European currency, the rupee managed to rebound on the first trading day of the week, recovering six paisa to trade at Rs86.00 and Rs86.10, on October 1. The euro ended last week at Rs86.06 and Rs86.16. On October 2, the single European currency slipped in terms of dollar in the global market. As a result, the rupee extended its overnight firmness over the European currency and recovered another 25 paisa, changing hands at Rs85.74 and Rs85.85.

The rupee continued its advance against the euro for the third consecutive day on October 3 further gaining 24 paisa to trade at Rs85.50 and Rs85.60. On October 4, the rupee further gained 55 paisa trading at Rs84.95 and Rs85.05. On October 5, the rupee failed to hold its upward advances against euro, shedding 25 paisa and traded at Rs85.20 and Rs85.30. Over the past seven days, the rupee however, has managed to display strength against the European single common currency gaining Rs1.11.

In the international financial markets, the dollar rose from record lows against the euro on the week’s opening day as investors pared bets against the US currency on a rally in stocks and a dip in oil prices ahead of a batch of economic data and central bank meetings. A sharp drop in oil prices helped ease some inflation fears and also lent support to the dollar after it lost about 4 percent of its value and fell to a record low against a basket of currencies in September.

In New York, the euro was down 0.3 per cent from last week at $1.4234, after having scaled a record high earlier of $1.4281, according to Reuters data. The dollar climbed 0.8 per cent against the yen to 115.71 yen, helped by soaring US stock prices. Sterling slipped from two-month highs against the dollar earlier, as investors sold the pound after British mortgage withdrawals for house purchases fell in August to their lowest since April. The pound fell 0.2 percent against the dollar to $2.0431 on October 1, after rising to $2.0493, its highest since July 27.

On October 2, investors trimmed bets of further declines in the US currency ahead of key economic data later this week. However, the dollar strengthened modestly despite the weak housing data, as dealers cashed in bets against the greenback at attractive levels. Few analysts believe the dollar’s long-term decline has ended or that the troubled US housing sector -- the source of global credit market turmoil -- has turned around.

The euro was down 0.5 per cent at $1.4155, not far from previous day’s all-time high of $1.4281. The dollar was steady at 115.80 yen, while the euro shed half a percent to 163.92 yen. Sterling rose to a two-week high against a basket of currencies, bolstered by talk of a 740 million pound rescue package for troubled UK mortgage lender Northern Rock. It was steady at $2.04141, having recovered from session lows of $2.0371.

On October 3, the dollar rose to a nearly six-week high against the yen after economic reports showed growth in US employment, boosting expectations for a favourable reading on weekend’s non-farm payrolls data. The greenback advanced for a third consecutive day after a report on the US services sector and another on private-sector payrolls indicated modest growth in the labour market last month, feeding hopes that the troubled housing market has not dragged down other parts of the US economy.

In late New York trading, the dollar was 0.9 per cent higher at 116.71 yen while the euro climbed 0.5 per cent to 164.51 yen. The euro edged 0.4 per cent lower to $1.4095, down from a record high of $1.4281 hit on the opening day of the week in review, according to Reuters data. The Australian dollar touched an 18-year high, and the New. It rose to an intraday high of $0.8919, about a third of a cent from an 18-year high of $0.8949 hit on October 2. It last traded little changed at $0.8821. The pound fell 0.2 percent against the dollar to $2.0378.

On October 4, the dollar fell, snapping a three-day rally, as dealers anticipated weekend US September payrolls data will keep the Federal Reserve on track to cut interest rates for the second time in six weeks. The euro reversed earlier losses and inched higher on the dollar, as dealers concluded that the European Central Bank had not changed its focus on inflation after leaving its benchmark borrowing rate unchanged at 4 percent earlier in the day. The market is becoming a little bit concerned that maybe the jobs numbers will not be strong enough to justify this correction

Euro initially slipped after ECB President said risks to European growth are weighted toward a weakening economy given the backdrop of market uncertainty. In subsequent comments, however, he said the bank’s policy stance had not changed to neutral, suggesting the next action, though not imminent, could be a rise in interest rates. The euro rose to session highs of $1.4149 before settling back to $1.4133, up almost 0.4 percent from October 3. Earlier on October 1, it hit a record high of $1.4281. Against the yen, the euro was up 0.1 per cent at 164.65 yen. The dollar was down 0.2 per cent to 116.48 yen. Sterling was up 0.2 per cent at $2.0352.

At the close of the week on October 5, the dollar steadied above a record low against the euro and a basket of currencies. The US currency had eased overnight, pausing in its recovery from all-time trough hit earlier this week as investors expected the jobs data to keep the Federal Reserve on track to cut interest rates again later this month. Also, activity was subdued as market players head for a long weekend, with Japanese financial markets closed on October 8 for a national holiday.

The euro was little changed from late US trade at $1.4134, staying well below a record high of $1.4283 hit on October 1. Against the yen, the dollar was nearly flat at 116.44 yen and the euro was steady at 164.59 yen. Sterling was little changed in choppy trading. The pound initially dropped against the dollar after US data showed 110,000 new jobs were created last month. It was nearly unchanged against the dollar at $2.0396. It fell as low as $2.0302 after the jobs report.