The demand for dollars has surged in the local market as banks are actively engaged in buying US currency for meeting their immediate requirements. Nothing was new in the market and the banks were demanding dollars for clearing the big payments before June 30.

Dollar's recovery in the world markets is also helping the dollar to move upward versus the rupee. In fact, the upward trend in oil prices globally has pushed the oil payments higher, and the banks are mostly buying dollars from the open market to meet their demand. Consequently the rupee in the week under review remained under dollar demand pressure.

In the first post-budget session on June 14, the dollar was seen hitting Rs58 barrier after it crossed an important mark of Rs57.92 in the inter bank market on increased dollar buying by local and foreign banks.

The rupee shed five paisa in relation to dollar to trade at Rs57.90 and Rs57.92. Both the local and foreign banks reportedly bought nearly 40-50 million dollars from the inter bank in the single day trading.

On June 15, the demand for dollar rose as a result of which the rupee shed more two paisa versus the greenback changing hand at Rs 57.92 and Rs 57.94. The rupee on June 16, inched up with two paisa gain against dollar trading at Rs 57.91 and Rs 57.92.

Earlier, the dollar was available at Rs 57.93 as some local banks had bought dollars in the early hours of trade to meet the payment requirements. But then the rupee regained its lost ground as buying pressure over the dollars eased.

Some analysts were of the opinion that the payments were near completion ahead of June 30; so the demand for dollars was not very high and the rupee is likely to recover more ground versus the greenback in the coming days.

On June17, the dollar recovered two paisa in relation to the rupee and settled for buying and selling at Rs 57.93 and Rs 57.94.In the afternoon session, the dollar went up at Rs 57.95 on high corporates' demand, amid tight supply position. Later, slight improvement in supply side helped the rupee to limit its losses.

On June 18, the rupee-dollar parity rates remained high in the interbank market as all leading banks were busy with payments. The rupee shed one paisa versus dollar for buying and selling at Rs 57.94 and Rs 57.95, amid tight dollar supply position.

At current levels the parity in the inter bank market is near the 15-month high of Rs.57.96. During the week, the rupee in the inter bank market lost 9 paisa versus the dollar.

In Kerb trading, a depreciation of five paisa was seen in the rupee's value versus dollar, which changed hands at Rs 58.43 and Rs 58.50 on the week's opening day.

But then the rupee started displaying slight strength afterward. On June 15, range-bound trading was seen in the open market as the rupee halted fresh erosion in its value versus dollar and traded at Rs 58.45 and Rs 58.50.

On June 16, similar trend was mirrored in the open market as the rupee recovered two paisa versus dollar for buying and selling at Rs 58.43 and Rs 58.48. On June 17, the rupee further gained three paisa in relation to the dollar changing hands for Rs 58.40 and Rs 58.45.

Rising demand for dollars from the interbank market pushed the rupee value down further on June 18. The rupee shed three paisa versus the greenback and traded at Rs 58.43 and Rs 58.48. It, however lost only three paisa over the previous weekend close.

On June 14, the rupee gained 10 paisa in relation to euro at Rs 69.95 and Rs 70.25 on declining value of the single European currency in the world markets. On June 15, the rupee failed to show same sentiment versus the euro, losing 50 paisa for buying and selling at Rs 70.50 and Rs 70.80 on fresh buying of the single European currency.

As a result of modest recovery in the global markets, the rupee fell versus the Euro in the local market, shedding 30 paisa for buying and selling at Rs 70.80 and Rs 71.10 on June 16.

The rupee, however, picked up 55 paisa versus the euro changing hands at Rs 70.25 and Rs 70.55 on June 17. Versus the euro, the rupee managed to gain 15 paisa for buying and selling at Rs 70.10 and Rs 70.40 on the back of its fall in the international markets on June 18. Over the previous week close, the rupee managed to recover five paisa this week.

In the international financial market, The dollar fell against the euro on the weeks opening day on June 14, and retreated from one-week highs against the yen after a report showed the US trade gap widened to a record in April.The US trade gap widened to $48.3 billion in April, markedly overstepping economists' forecasts of a $45.0 billion deficit.

In New York, the euro traded at around $1.2060, solidly up from about $1.2000 shortly prior to the US data and up about 0.5 percent on the day. Against the yen, the dollar traded at 110.88 yen, off its one-week highs around 111.35 yen, but up about 0.6 percent on the day.

Earlier, the dollar hit a three-week high on the euro and the yen tumbled as a Federal Reserve official's comments bolstered the view that US interest rates could rise sharply this year.

Against the Swiss franc, the dollar was down 0.3 percent at 1.2564 francs. Sterling slipped 0.1 percent to $1.8152, hitting its lowest level in almost three weeks versus the dollar, pressured by the greenback's broad rally and jitters over British politics after the ruling Labour Party suffered at the polls.

The dollar surged across the board as hawkish comments by Minneapolis Federal Reserve President that US interest rates could rise sharply this year. On June 15, The dollar traded lower against the euro after a US inflation report hinted that the Federal Reserve might be more measured in raising interest rates than some analysts had previously thought.

Federal Reserve Chairman Alan Greenspan, seeking Senate approval for a fifth term at the helm of the US central bank, avoided offering clues about potential imminent US rate rises.

The dollar lost some ground against the euro in the wake of Greenspan's initial remarks, but analysts did not attribute the slip to the Fed chief. Late in New York, the euro was up about 0.3 percent, trading around $1.2090. Against the yen, the dollar fell about 1 percent to session lows around 109.84 yen.

Sterling traded up about 0.5 percent to $1.8234. It rose broadly after US inflation figures pushed down the dollar by hinting US interest rate hikes might be more gradual than some in the market expected.

Against the Swiss franc, the dollar was down about 0.1 percent at 1.2547 francs. The dollar's fall was mainly attributable to "tame inflationary numbers" in the United States, consolidating expectations of a modest 25 basis point Fed rate hike at the end of the month.

The less aggressive the Fed is prepared to be in raising rates, the less that would likely boost the dollar, because higher yields enhance the appeal of dollar-denominated assets to foreign investors.

On June 16, the dollar rebounded, retracing steep losses the previous day, as a robust US industrial output report offering fresh signs of a strengthening US economy, fuelled demand for the greenback.

An upbeat assessment of the US economy from the Federal Reserve's "beige book" report, however, had fairly muted impact on the dollar. In late New York trade, the euro was trading at $1.2006, down about 1.3 percent on the day.

Against the yen, the dollar was trading up about 0.5 percent on the day at 110.03 yen. Against the Swiss franc, the dollar was up about 1.5 percent at 1.2667 francs. Sterling rose against the euro and was flat against the dollar after data showed wage growth picking up, reinforcing expectations of British interest rate hikes.

It traded nearly one percent higher on the day at 65.76 pence per euro. On June 17, the dollar traded lower against major currencies, receiving little support from a string of robust US economic reports.