The currency market opened the week on a quiet note, after remaining closed for three days from March 23 to March 25, on account of the Pakistan Day and Moharram Holidays.

The rupee remained almost stable throughout the week maintaining its thinness over the dollar. Currently dollar inflows is supporting the rupee amid lacklustre activity. In the inter-bank market the rupee moved both ways in a narrow range. Slightly higher demand pushed the rupee down by 3 paisa on March 26, to trade at Rs60.13 and Rs60.15 versus the dollar, against Rs60.10 and Rs60.12 of previous weekend close. There was no major fluctuations amid thin trade in the next two days. It revert to its previous weekend’s level of Rs60.10 and Rs60.12 after gaining 3 paisa in two days’ trading. Some exporters entered the market to sell dollar which helped the rupee to recover its lost ground. On March 29, the rupee further gained 2 paisa over the overnight level in a quiet trade, at close the dollar was trading at Rs60.08 and Rs60.10. During the week the rupee gained only 2 paisa against the dollar.

Against major currencies at the inter-bark counter the rupee last week lost ground versus the Australian and New Zealand dollars and the Japanese yen. It was stable against the Hong Kong dollar, Chinese yuan, Malaysian ringgit, Saudi and Qatari riyals and the UAE dirham. It, however displayed strength over the British pound, euro, Canadian and Singapore dollars, Swiss franc, Swedish krona, Norwegian and Danish krones and Kuwaiti diner.

The rupee followed a similar trend in the herb, where it managed to hold its firmness over the dollar. After remaining stable at previous weekend’s level of Rs60.40 and Rs60.50 on the opening, day of the week, the rupee gained 30 paisa in the following two days. The dollar was quoted at Rs6O.20 and Rs60.30 on March 28. Continued inflow of dollar helped the rupee to maintain its strength over the dollar. On March 29, the rupee dipped 2 paisa. However, it continued to maintain its firmness over the dollar which traded at Rs60.22 and Rs60.27. During the week the rupee in the kerb gained 18 paisa for buying and 23 paisa for selling. Experts hope the rupee will continue to display strength and gain further ground in the coming days amid dull trading.

The dollar extended overnight gains to fresh three-week peaks, and the euro pushed above the key 117-yen level for the first time since February 25, as the dealers anticipated end of the Japanese fiscal year and recent yen-supportive capital repatriation flows at the end of March 31. At the end of the US trading, the euro hovered near 117-yen, at a 1-month peak and up 0.50 per cent from the previous US close. The yen fell to multi-week lows against the euro and the dollar on expectations that the capital would flow out of Japan in the new fiscal year as the country’s economic fundamentals still look grim.

Against the yen, the greenback traded around ]33.40 yen, up 0.4 per cent from the previous US close and at its strongest level in three weeks. The yen, which suffered its worst losses in almost 11 months last week, has shed about seven-yen since hitting nearly three-month highs in early march.

A sharp drop in the US blue chip and technology stocks allowed the euro to pare losses versus th dollar, finishing the US trading at 87.70 cents. Earlier, the euro was weighed down by data showing Germany’s March inflation rate ticked higher, which sparked market fears the European Central Bank may raise rates sooner than expected and dent the rumours burgeoning recovery. Preliminary data indicated German inflation picked up to 1.8 per cent year-on-year in March from 1.7 per cent in February. Month-on-month, German consumer prices rose by 0.2 per cent in March, having risen by 0.3 per cent in February.

In New York, the dollar recovered from a mild scare after a remark by the New York Federal Reserve President William McDonougil that the dollar was “a little overvalued” prompted a sell-off. The greenback, which lost ground against both the euro and the yen in the wake of McDonough’s comments, recovered as markets realized the central banker’s “theoretical” comments were taken out of context.

The euro traded near 87.70 cents versus the dollar, unable to crack stiff resistance near 88 cents and virtually unchanged on the day. The dollar fell sharply against the yen but bounded above 133 yen in late trading, well below previous day’s three-week high but off session lows at 132.29 yen. The euro bought 116.60 yen off 0.30 per cent on the day.

In Tokyo, the yen snapped a three-session lost streak against the dollar helped by Tokyo stocks, which logged morning gains despite falls on Wall Street. Volume was sluggish and moves were choppy as Tokyo players kept trading to a minimum before the end of the fiscal on March 31. Dealers estimated that volume was down to nearly three-quarters of nominal trade as the dollar faded lo 1.33.02/12 yen in Tokyo from 1.33.37 in late New York.

In London, sterling rose against the dollar as comments from the New York Federal Reserve President William McDonough that the dollar may be a little overvalued knocked the greenback down across the board. The comments drove sterling up more than half a cent to a high of $1.4285, against $1.4254 in late New York. Sterling held gains against the euro near its three-week high of 61.29 pence set earlier in the session as a jump in a key German business sentiment survey flailed to inspire the single currency.

In New York, the dollar advanced against the euro and the Swiss franc in thin trading helped by mounting market expectations that the US economy is rebounding at a stronger pace than previously expected. Although the dollar received limited mileage from the news, market participants are awaiting a clutch of data on manufacturing and consumer confidence for further clues on the health of the economy.

The yen firmed against both the dollar and the euro amid dealers speculation that, in a last-minute dash, Japanese investors sought to send money back home ahead of the March 31 business year-end deadline. At the close of the US dealings, the dollar bought 1.32.70 yen, off 0.25 per cent on the day and below three-week highs at 133.46 yen. The euro traded near 115.75 yen, down 0.70 per cent on the day.

In Tokyo the dollar gave way to Japanese demand for the yen but managed to shake off a scare over the US strong dollar policy. Sentiment was a bit tense after the dollar fluctuated wildly overnight on the theoretical musings of a Federal Reserve official. But traders said movements in Tokyo had more to do with the simple desire of Japanese exporters to convert foreign currency into yen before the financial year-end.

The yen took a brief hit when credit agency Moody Investors Service said it may downgrade certain credit ratings of major Japanese banks. The dollar had risen as high as 1.33.28 in early trade talk that Japanese investors would be buying ahead of the morning fix. In the even, however, it were the Japanese exporters that appeared selling dollars in droves and the inter-bank market was badly wrong-footed. The selling sketched to several yen crosses with the euro, Australian and Canadian dollars all being dumped. The eure flinched back to 116.25/36 yen from 116.59 in New York, though it was still offshore lows of 116.05. Against the dollar, the euro, was hesitating at $0.756/61 after a choppy session saw it first test $0.8730 support before rebounding to try, and fail, at the 88-cent barrier.

In London, sterling dipped against the dollar to one-week lows tracking the euro downwards, with sentiment partly weighed by disappointing UK growth data. The National Statistics said the final estimate of the fourth-quarter gross domestic product growth was flat from the third, while year-on-year growth was revised down to 1.6 per cent from 1.7 per cent.

Sterling edged down to $1.4220 from $1.4267 in late New York trade. Against a broadly weak euro, it held gains near its three-week high to stand at 61.29 pence. The GDP figures did disappoint the markets given the upward revision in business investment data but economists are unlikely to be too concerned.

On March 28, sterling posted a three week high against the euro boosted by euro weakness and a new poll on joining the single currency, as markets gradually wound down ahead of national holidays on March 29 and April 1. The pound was trading at 61.29 pence per euro and at $1.4233. The three-week high against the euro was struck around 61.17.

The dollar fell to its lowest level against the yen this week as the expected demand for greenback from the Japanese investors for new business year failed to materialize. Demand for yen against the euro, which dipped overnight after a surprise Swiss rate, cut also helped the Japanese currency against the dollar. The dollar was at 132.27 yen down from 132.71 yen in late New York, where it hit a low of around 132.18. The near-term target was seen at 132.00, then 131.70.

The euro, along with the Swiss franc, came under pressure, especially against the dollar, after the Swiss National bank unexpectedly cut its money market repo rate, indicating it was worried by the franc’s recent strength.

The euro stood at 115.50 yen down from 115.76 yen in late offshore trade. Against the dollar, the single currency regained some ground at $0.8735 from a two-week low at’ $0.8719 offshore, but still down compared with $0.8760 this time in Tokyo.