IN the local currency market, the rupee continued to suffer losses versus major currencies this week.

Higher oil prices in the international market, rising import demand, weak macroeconomic indicators and political uncertainty on the domestic front has weakened the rupee against dollar in recent weeks.

The forex reserves hit a record $18.31 billion in the week ended July 30, 2011 but these has fallen to $16.88 billion last week.

The rupee has already breached Rs89 psychological barrier against the greenback and analysts now fear that it could soon hit Rs90 mark. It last hit this level in September which prompted the central bank to intervene in the market. The rupee lost Rs2.78 or 3.23 per cent since the start of this fiscal year.

Meanwhile on the interbank market, the rupee commenced this week on a dismal note, extending weekend decline against dollar amid rising demand for the US currency.

It lost 25 paisa versus the greenback in the opening session, trading at Rs88 and Rs88.05 on November 28 against last weekend’s Rs87.75 and Rs87.80. However, it managed to recover its overnight weakness in the second trading session and picked up 22 paisa against the dollar at Rs88.23 and Rs88.27. In the third trading session, the dollar hit Rs88.80 before settling at Rs88.70 and Rs88.75 after the rupee slipped, losing 47 paisa on the buying counter and another 48 paisa on the selling counter at the close of the day.

The rupee resisted sharp fall versus dollar, losing five paisa in the fourth trading session. It was seen changing hands at Rs88.75 and Rs88.80 on December 1. Finally it hit new high in the fifth trading session with dollar changing hands Rs88.95 and Rs89. This was the fourth consecutive day of rupee decline. The banks bought nearly $60-$70 million in the last trading session to meet the payments.

On week over week basis, the rupee in the interbank market shed Rs1.25 against the dollar on cumulative basis this week.

In the open market, the rupee hit a record low this week, breaching Rs89 barrier against dollar as importers remained engaged in forward buying of dollar to cover oil import payments. On the opening day of the week, the rupee shed 30 paisa and traded against the dollar at Rs88.15 and Rs88.35 on November 28 against last week close of Rs87.85 and Rs88.05.

In the second trading session, however, the rupee managed to rebound against the dollar and recovered five paisa at Rs88.10 and Rs88.30.

On November 30, the rupee failed to hold its overnight firmness against the dollar and shed 10 paisa in the third trading session to trade at Rs88.20 and Rs88.40.

Downtrend in the rupee/dollar parity persisted on the fourth trading day. The rupee posted 40 paisa decline against the dollar which was seen changing hands at Rs88.60 and Rs88.80 on December 1. In the last trading session the rupee shed 20 paisa for buying and another 40 paisa for selling before closing the week at Rs88.80 and at Rs89.20 on December 2.

During the week, the rupee in the open market lost up to Rs1.15 against the dollar. The rupee last hit Rs89 mark against the dollar in September.

Versus European single common currency, the rupee remained depressed this week. It mostly traveled in the negative zone after opening the week in review at Rs116.90 and Rs117.40, down 87 paisa from last weekend’s Rs116.03 and Rs116.53.

The rupee extended its overnight weakness in the second trading session, slipping further against euro in the second trading session by 49 paisa at Rs117.41 and Rs117.91. However, in the third trading session, euro lost ground versus the rupee which posted 80 paisa gain and traded at Rs116.61 and Rs117.11.

In the fourth trading session, the rupee gave up its overnight firmness, sharply losing Rs1.73 at Rs118.34 and Rs118.84 on December 1.

The rupee downslide versus the Eurozone common currency persisted in the last trading session as the rupee hit record lows, losing 49 paisa before closing the week at Rs118.83 and Rs119.33 on December 2. The rupee this week suffered a net loss of Rs2.80 against the European single common currency.

The euro had touched its highest level against the rupee at Rs126.57 on June 7 this year.

On the international front, the euro rose from a seven-week low against the dollar in the New York late trade and was last up 0.5 per cent to $1.3304 after climbing to almost $1.3400 on the opening day of the week. Steady selling had driven the currency down seven per cent from a high on October 27.

Against the yen, the dollar rose 0.3 per cent to 77.98 yen. Sterling recovered from a seven-week low against the dollar in London trade, rising nearly one per cent on the day to a session high of $1.5595, before curbing some gains to last trade up 0.6 per cent at $1.5542.

On November 29, the euro rose against the dollar for a second straight session, up 0.1 per cent at $1.3328, after earlier rising nearly one per cent to a session high of $1.3442, initially on hedge fund buying. The dollar fell 0.2 per cent at 77.84 yen.

Sterling held firm against the dollar, touching a one-week high of $1.5658 in London trade. It was last up 0.8 percent on the day at $1.5625.

On November 30, the euro jumped around 2 cents to a session high of $1.35337 and last traded at $1.34380, up 0.9 per cent, on pace for its best one-day rise since late October.

On the month, however, the euro was down 2.8 per cent. The yen was 0.4 percent from a one- month low against the dollar. It was little changed at 77.94 yen in late New York trade. Sterling rose sharply against the dollar, up 0.6 per cent at $1.5715 in London trade.

On December 1, the euro rose for a fourth straight session against the dollar, reaching a high of $1.3521. But Gains dissipated in late New York trading. It was last up 0.2 per cent at $1.3464. Earlier the euro had hit a one-week high of $1.35337 on December 1. Against the Japanese currency, the dollar was up 0.3 percent at 77.74 yen. Sterling rose 0.2 percent on the day to a session high of $1.5746, paring gains to trade around $1.5690 in late London trade.

At the close of the week on December 2, The euro rose for a fifth straight session against the dollar, hitting a high of $1.35505.

Against the yen, the dollar edged up 0.2 per cent to 77.870 yen. Sterling gave up gains against the dollar in London and was down 0.4 percent at 1.5627, falling past support at $1.5637-the previous day’s low. It had risen to $1.5721 from around $1.5707 immediately after the release of US weekend job data, not far from its peak of $1.5780 hit on November 30.