The week opened on a positive note. Smooth supply of dollars helped the local currency to maintain its steadier trend on the week's opening day. The rupee staged a modest recovery in the inter-bank market and gained three paisa against the dollar, which was saw changing hands at 59.28 and 59.30 on January 24.

On January 25, the upward trend persisted. The rupee extended its firmness despite the higher demand for dollars to meet oil payments. It further gained two paisa and traded at Rs59.26 and Rs59.28 against the dollar.

The dollars' easy supply helped the rupee to gain strength on January 26. The rupee maintained its winning streak and recovered another eight paisa versus the dollar, which was quoted at Rs59.18 and Rs59.20 in the inter-bank market.

Dollar selling by exporters and inflows from the overseas Pakistanis also added to rupee's firmness. The rupee, however, failed to maintain its firmness over the dollar on January 27.

Increase in demand for dollars forced the rupee to give up its overnight gains in the inter-bank market. The rupee came under pressure on reports that imports are on the rise and shed eight paisa, which made the dollar to trade at Rs59.25 and Rs59.28 on the day.

On January 28, fresh dollars demand by the importers forced the rupee to surrender four paisa for buying and three paisa for selling in the inter bank market to trade at Rs59.29 and Rs59.31.

The rupee has lost nearly 12 paisa within two days. Over the week, however, the rupee managed to recover two paisa versus the dollar. In the open market, the rupee managed to recover five paisa against the dollar on January 24, and traded at Rs59.65 and Rs59.75.

On January 25, the parity stood unchanged as the rupee managed to hold its overnight levels against the dollar. On January 26, the rupee recovered versus the dollar, gaining 15 paisa for buying and 10 paisa for selling to trade at Rs59.50 and Rs59.65.

On January 27, the rupee managed to hold its rising trend picking up another 10 paisa for buying and 15 paisa for selling to trade at Rs59.40 and Rs59.50 against the dollar.

On January 28, no major difference was seen in the inter-bank and open market rates. The rupee-dollar parity rates eroded most of the gap on easy supply of the US currency.

Against the inter-bank trend, the rupee maintained its overnight gains in the open market, further picking up 15 paisa versus the dollar at Rs59.25 and Rs59.35. Over the previous week close, the rupee in the open market recovered 45 paisa against the dollar this week.

The euro's continued surge versus the major currencies is an encouraging factor for the Pakistan's exporters. Against the European single common currency, the rupee showed its strength on the week's opening day. It sharply picked up 40 paisa, trading at Rs77.65 and Rs77.95 versus the euro on January 24.

The rupee extended its firmness over the dollar on January 25 and recovered five paisa more over its overnight levels, changing hands at Rs77.60 and Rs77.90. The rupee continued to show its strength versus the European common currency on January 26. It gained 45 paisa in relation to the euro in single day trading at Rs77.15 and Rs77.45.

The rupee, however, failed to maintain its surge versus the euro on January 27 and lost 55 paisa to trade at Rs77.70 and Rs78.00. It managed to gain 40 paisa in terms of the euro for buying and selling at Rs77.30 and 77.60 on January 28. At this level, the rupee was still up against the euro by 45 paisa over last week close.

In the international financial markets, the dollar traded little changed to slightly lower against the euro on January 24, as markets weighed European comments urging Asian countries to let their currencies rise and share the burden of the dollar's weakness.

The US Treasury Secretary comments that the Group of Seven rich nations are not expected to offer any new language on foreign exchange at next month's meeting of finance ministers fuelled mild selling of the dollar against the yen.

In New York, the euro was flat to slightly higher at $1.3058. Against the yen, the euro was down marginally at 133.96, while the dollar fell against the yen to 102.60 yen. The US currency also slipped against the Swiss franc to 1.1831 francs, while the pound rose to $1.8800.

On January 25, the dollar rallied, buoyed by a US consumer confidence report that was stronger than expected and news suggesting China would not revalue its currency soon. In New York, the dollar was up 1.5 per cent at 104.14 yen, and roughly one per cent against Swiss franc at 1.1931 francs.

The euro was down 0.6 per cent against the greenback at $1.2972, while the pound fell to $1.8639. Sterling lost ground to a firmer dollar and also ticked lower against the euro as investors awaited Bank of England minutes and growth data on the outlook for UK interest rates. It traded down three quarters of a percent at $1.8646.

On January 26, the dollar weakened and lost ground in momentum-driven trading after China reignited market talk of a currency revaluation. With talk of a potential yuan revaluation back on the table, the dollar came back under selling pressure, wiping out the previous day's gains.

In New York, the euro was up at $1.3081 but off against the yen at 134.72 yen. The dollar was also weaker against the Japanese currency, off more than one per cent at 103.01 yen and down at 1.1827 Swiss francs.

Sterling, lifted by above-consensus UK economic growth data and relatively hawkish minutes from the Bank of England's Monetary Policy Committee, gained more than one per cent at $1.8828.

On January 27, the dollar rallied against most major currencies with strong US economic numbers providing further impetus to the currency's rebound from the previous day's steep losses. In New York, the euro was down around 0.4 per cent at $1.3036.

The dollar traded flat at 103.06 yen, but rose against the Swiss franc to 1.1846 francs. Sterling rose against the dollar on strong UK housing data. The pound was up at $1.8879.

At the close of the week on January 28, the dollar hit a nine-day low against the yen immediately after an economist at the Chinese Academy of Social Science, said the time was ripe for China to move gradually toward a more flexible exchange rate regime.

It later recouped those losses, shooting up a quarter of a yen after a report by Dow Jones quoted a Chinese central bank official as saying the comments were not an official government view. But the dollar suddenly rose a quarter yen to as high as 103.40, up more than a yen from the day's low.

The dollar was at around 103.20 yen, firmer from US late levels. The euro fetched around $1.3035 versus $1.3045 in late US trade. Sterling dropped more than a cent from earlier two-week highs of $1.8931 to below $1.88 and weakened.