A mixed trend was witnessed at the local currency market with the rupee suffering losses at the beginning of the week but then gradually recovering by mid-week before closing on a negative note.
In the inter-bank market, slight increase in dollar-demand on August 25, kept the rupee under pressure versus the dollar which changed hands at Rs57.82 and Rs57.84 reflecting one piasa fall for buying and 2 paisa fall for selling in the value of rupee. Slow activity was witnessed on August 26, when the lack of dollar-demand helped the rupee stage a recovery of 3 paisa. The dollar traded at Rs57.79 and Rs57.81 on the day.
Easy supply of dollar on August 27, helped the rupee to extend its firmness for another two days with the local currency recovering 8 paisa against the dollar. At close on August 28, the dollar was seen changing hands at Rs57.71 and Rs57.73. Lack of exporters’ interest in dollar buying and fewer bank demand helped the rupee manage its firmness over the dollar. However, on August 29, the rupee came under mild pressure and lost one paisa at Rs57.72 and Rs57.74, but reflecting a gain of 9 paisa over the previous week end close of Rs57.81 and Rs57.82.
In kerb trading, the rupee was unchanged at Rs58.15 and Rs58.25 on August 25, amid balance dollar-demand and supply position. It, however lost 5 paisa for dollar buying amid slow activity on August 26 when the dollar traded at Rs58.20 and Rs58.25. Continued check and balance in the kerb kept the rupee unchanged for buying but losing 5 paisa for selling to trade at Rs58.20 and Rs58.30 on August 27. However, lack of interest in dollar buying in the absence of major demand on August 28, kept the parity stable at Rs58.20 and Rs58.30. Finally the rupee ended the week unchanged on August 29. During the week, the rupee shed only 5 paisa against the dollar.
Against other major currencies at the inter-bank forex counter, the rupee continued to suffer losses versus the British pound and Japanese yen. It posted fresh losses against the euro, the Canadian dollar, the Swiss franc, the Danish and Norwegian krones, the Swedish krona, and the Kuwaiti dinar. On the other hand it extended gains versus the Australian and New Zealand dollar. Fresh gains were recorded over the Singapore dollar and the South Korean won while the rupee remained stable against the Hong Kong dollar, the Chinese yuan, the Malaysian ringgit, the Saudi and Qatari riayls and the UAE dirham.
In the international financial market, the dollar flitted in narrow ranges against major rivals on August 25, consolidating last week’s strong gains and supported to a modest extent by the stronger-than-expected US economic data. The market was thin and mainly technically driven as traders awaited a slate of the US economic reports later in the week. The greenback was modestly lower against the yen, as the Japanese currency retreated from one-month highs.
The dollar was at 117.34 yen against the Japanese currency, down 0.1 per cent. The pound was down 0.2 per cent at $1.5713. The euro was at $1.0883 against the dollar, virtually flat on the day. The dollar gained only modestly from news that the pace of US existing home sales grew by 5.0 per cent in July, reaching a record high at 6.12 million units.
On August 26, the euro rose from a four-month low against the dollar rumour-driven profit-taking momentarily overrode widespread pessimism over the health of Europe’s economy. It remained encumbered by the growing consensus that a global recovery will be led by the United States, despite the fact that Germany’s key Ifo business climate index rose for the fourth straight month in August to 90.8 prompting hopes of a rebound in the euro zone.
The euro overtook $1.09 against the dollar up 0.35 per cent from the previous US session and a cent from the four-month low it hit during London trading. Meanwhile, heavy liquidation of dollars against the Swiss franc drove the US currency nearly 2 centimes from an eight-month high at 1.4270 standing near 1.4085 in afternoon trading. The dollar changed hands around 117.35 yen not far from previous day’s one-month low at 117.17 yen. Against the yen, the euro bought 127.76 yen less than a unit from its deepest trough since March 19.
Sterling plumbed four-month lows against the dollar as the greenback got a boost from another set of the upbeat US economic data while the Hutton inquiry in the UK entered a crucial phase. The pound fell to a low of $1.5622, dropping in sync with the euro. It held to tight ranges against the single currency around 69.10 pence. The dollar drew strength from further signs that the US economic recovery is gathering pace. July durable goods orders climbed one per cent, led by the strongest demand for cars since January.
On August 27, the dollar pared part of its earlier losses against the euro in late trade but was still lower on the day against the single European currency, as traders braced for a flurry of upcoming US data. The dollar gathered more of a bid as traders mulled the possibility that the next batch of data, including US gross domestic product and jobless claims would show the US economic recovery gathering pace. Trader was choppy and technically driven at times maid a light economic data calendar, offering currency traders few directional cues.
Earlier in the session, the euro rebounded from the previous day’s multi-month lows against the dollar and yen after a senior Japanese finance official said the single currency’s rapid slide was “undesirable. The euro has shed more than five yen in the last week alone as signs of recovery in Japan amid a stalling European economy have prompted heavy liquidation of euro zone debt holdings in favour of Japanese assets.
The euro was at $1.0877 against the dollar, up 0.2 per cent on the day. Against the yen, the euro was at 127.75 yen, up 0.3 per cent. The dollar was at 117.42 yen nearly flat. Against the Swiss franc the dollar was at 1.4143 francs, up 0.1 per cent and off an eight-month high reached on August 26. The pound was at $1.5717, up 02 per cent. The euro’s value against the dollar “has been caught in the cross-fire of correction of a huge move in euro/yen, and that has been driven by real money purchasers of Japanese equities and the sale of euro zone bonds recently.
The pound inched above a recent four-month low on the dollar on August 27 but tripped lower against the euro as the single currency rebounded slightly from a recent sell-off. With little in the way of economic events to lend impetus, the main news focus for sterling was a judicial inquiry into the apparent suicide of British weapons expert David Kelly. The pound was a third of a per cent higher on the day at $1.5737 after dropping to a four-month low of $1.5616 a day earlier. It was faring less well against the euro, off a third of a per cent at 69.36 pence per euro. The euro itself was more than half a per cent stronger on the day against the dollar, having plumped to its lowest since early April.
On August 28, the dollar steadied in narrow ranges against major rivals as traders digested some mildly disappointing US economic data and started to set their sights on an upcoming appearance by the Federal Reserve head. The dollar fell from an earlier four-month high against the euro and traded nearly flat on the day after US growth data showed the economy advanced in the second quarter, but failed to provide new incentive for traders to buy dollar.
The euro was at $1.0870 against the dollar, virtually flat on the day. The dollar was at 117.30 yen against the Japanese currency, nearly unchanged. Against the Swiss franc, the dollar was at 1.4160 francs, up 0.2 per cent. The pound was at $1.5761, up 0.3 per cent.