Pressure on the rupee persisted this week. The demand for dollars in interbank market on July 19, was strong. However, the rupee shed one paisa versus the greenback changing hands at Rs58.24 and Rs58.26.

Continued dollar-demand by the corporate sector is exerting pressure on the local currency, which stayed almost unchanged versus the dollar on July 20, and traded at Rs58.24 and Rs58.26.

On July 21, the rupee failed to resist further slide versus the dollar and shed one paisa more to change hands at Rs58.25 and Rs58.27 over its overnight levels. At one stage during the session, the rupee, touched the new low at Rs58.29 for a dollar. Since the new fiscal year started, the rupee has shed nearly 15 paisas in the interbank market versus the dollar.

On July 22, dollar-demand was high to meet the import payment requirements, especially of machinery to revive the sick units and set up new industries for controlling unemployment.

Pressure on rupee strengthened causing a further decline of five paisas versus the dollar, which traded at Rs58.30 and Rs58.33. On July 23, rupee managed to sustain its overnight levels versus dollar at Rs58.31 and Rs58.33. Over the previous week close, the rupee this week shed eight paisas in the interbank market versus the rising dollar.

In kerb trading on July 19, contrary to the interbank market trend, the rupee has given up its weekend weakness versus the dollar, recovering two paisas to trade at Rs58.45 and Rs58.50, despite heavy demand. It remained unchanged on July 20, and traded versus dollar at its overnight levels, despite persistent demand for dollars. On July 21, the stable trend persisted on July 22, as the dollar maintained its overnight levels versus the rupee changing hands at Rs58.45 and Rs58.50.

However, on July 23, the rupee failed to hold ground and shed seven paisas in relation to dollar, which traded in the open market at Rs58.52 and Rs58.57. Increased dollar buying by the corporate sector dragged down the rupee value in the open market, as exporters were holding back the export proceeds, creating dearth of dollars in the market. As compared to previous week close, the rupee, lost five paisas against the dollar in the open market this week.

Against the euro, the rupee on July 19, managed to recover 30 paisas over the previous week close and traded at Rs72.45 and Rs72.75, as the single European currency failed to hold its firmness versus the dollar in the overseas markets. The rupee recovery proved short-lived versus the single European currency which gained five paisas on July 20, to trade at Rs72.50.

On July 21, the rupee again gained 50 paisas versus euro and settled at Rs72.00 and Rs72.30. The rupee strength over the euro persisted in the remaining period of the week, as it extended a further gain of 50 paisas on July 22, changing hands at Rs71.50 and Rs71.80.

On July 23, the rupee managed to gain another 10 paisas versus euro and traded at Rs71.40 and Rs71.70. As a result of three consecutive gains in a week, the rupee managed to recover 135 paisas against the euro over its previous week end levels.

In the international financial market, the dollar rose against the euro on July 19 as traders showed reluctance to extend the US currency's losses ahead of the US Federal Reserve Chairman Alan Greenspan semi-annual monetary report to the US Congress.

The euro rose to $1.2461 per dollar in the Asian session, its highest since early march, before trading at $1.2435, down 0.1 per cent in New York. The US currency also regained its footing against sterling with the pound trading down 0.2 per cent at $1.8684 and the dollar trading up 0.19 per cent against the Swiss franc at 1.2281 francs.

However, the dollar traded down about 0.5 per cent against the Japanese currency at 108.19 yen. Market data showing speculative flows behind much of the dollar's recent decline also made investors hesitant to sell the dollar.

Sterling hit a 4-1/2 month high against the dollar but later retreated as the greenback recovered a bit from broad losses it suffered in the wake of last week's disappointing US data.

On July 20, the dollar climbed against most major currencies after the Federal Reserve Chairman Alan Greenspan said the US economic growth was solid and inflation was not a threat.

In New York, the euro traded down 0.8 per cent at $1.2332 after falling to session lows at $1.2300 shortly after Greenspan's initial remarks. Against the yen, the dollar rose to 108.80 yen, up 0.4 per cent on the day. The dollar surged against the Swiss franc to trade at 1.2470 francs, while sterling fell 0.8 on the day to session lows at $1.8529.

On July 21, the dollar extended gains against major currencies in the wake of optimistic comments on the US economy from Federal Reserve Chairman Alan Greenspan, reinforcing expectations of further interest rate hikes.

In New York, the euro traded down 0.6 per cent at $1.2255 against the dollar after falling to a two-week low at $1.2212 in earlier trade. Further compounding the euro's losses was an earlier report saying Iraqi security forces had discovered missiles carrying nuclear warheads in Iraq.

The dollar rose more than one per cent against the yen to 109.88. Against the Swiss franc, the dollar climbed to 1.2507 francs. Higher-yielding currencies were particularly hard hit with sterling down at $1.8396, and the Australian and New Zealand dollars falling 2 per cent on the day, respectively.

The pound dropped by 1-1/2 US cents to two-week lows. The pound had shed around one per cent on the day, hitting a session low of $1.8329. It has lost over four cents from 4-1/2 month highs set against the dollar.

Against the euro it lost around a third of a per cent to 66.77 pence before the euro itself began to lose more sharply against the surging greenback. The pound also dropped to a two-week low on its trade-weighted index to 105.7, having hit a one-month high on the week's opening day.

On July 22, the dollar traded slightly firmer against the euro after a week-long rally by the US currency appeared to be running out of steam. The euro had fallen about 1.5 cents since Federal Reserve Chairman Alan Green span said earlier in the week US economic growth was solid and inflation was not a threat, reinforcing expectations of further interest rate hikes. Higher US interest rates tend to enhance the allure of dollar-based assets for global investors.

Greenspan's comments helped to push the dollar to a near three-week peak of around $1.2210 per euro and a one-month high around 110.30 yen on July 21. In New York, the euro slipped modestly against the dollar to $1.2254. Against the yen, the dollar traded steady at 109.70 yen.

Earlier news that a Boston bound Amtrak train was stopped and searched by police in Newark, New Jersey fuelled some selling in the dollar and buying of the safe-haven Swiss franc earlier in the day. The dollar traded virtually flat against the Swiss franc at 1.2482 francs. Sterling was unchanged against the dollar at $1.8430.

Sterling reversed early losses against the dollar in volatile trade as the greenback's momentum slowed and robust domestic retail sales data reinforced expectations of a British rate rise next month.

The dollar succumbed to profit-taking pressure after upbeat comments by Federal Reserve chairman Alan Greenspan on the economy this week ignited a broad-based rally in the greenback, particularly against higher-yielding currencies.

At the close of the week on July 23, the dollar settled near multi-week highs but trade was subdued as investors looked beyond the currency's recent rally on the US Federal Reserve chief's upbeat outlook for the US economy.

Few decisive factors have emerged to help set a new direction for the dollar or the yen, and the two currencies were holding to a narrow range. The dollar bought around 109.80 yen, little changed from around 109.75 in late New York trade but off a one-month peak of about 110.30 yen set a day earlier. The euro was down a touch at $1.2245, not far from a three-week low of around $1.2210 hit on July 21.

The pound touched its highest level in a month against the euro but fell half a per cent towards the week's low on the dollar as the greenback's dominance across the board overshadowed upbeat UK growth data.

Sterling had eased earlier in the session because although UK second quarter growth data came in as analysts had forecast at a robust 0.9 per cent on the quarter, it disappointed last minute speculation of an even stronger number.