Pakistani rupee showed stable trend versus dollar in the local currency market this week. On the week’s opening day, higher inflows of dollar did not allow the rupee to show any weakness versus dollar in the inter-bank market.
The dollar changed hands at Rs57.54 and Rs57.55 on October 20. There was normal demand for dollar and fluent supply helped rupee maintain its previous weekend’s levels. The rupee moved slightly versus dollar but showed no change at Rs57.54 and Rs57.55 on October 21.
On October 22, the rupee shed four paisas for buying and three paisas for selling in relation to dollar in the inter-bank market and traded at Rs57.50 and Rs57.52. Sufficient dollar supply and the absence of major demand by banks helped the rupee to recover ground versus the greenback. The rupee extended further gain of seven paisas against the dollar on October 23 to trade at Rs57.43 and Rs57.45. Thus, the rupee has gained 10 paisas versus dollar in two-days. The rupee gained strength on high inflows of dollars and less demand by the banks. Basically, the dollar-supply was high despite normal trading, besides, exporters were also in the market to sell their holdings. The parity remained unchanged on October 24, amid lack of dollar-demand, closing the week at Rs57.43 and Rs57.45. During the week the rupee gained 10 paisas against the dollar.
In line with the inter-bank market trend, the rupee managed to hold its previous weekend’s levels versus the dollar for buying and selling at Rs57.82 and Rs57.87on October 20. Continued high inflow of dollars in the local money market on October 21, helped the rupee recover seven paisas versus the dollar to trade at Rs57.75 and Rs57.85. Fresh arrival of dollars kept the rupee on the upside. Market players received increased dollar supply as a result of sell-off in dollars by Afghan money changers. Rising trend in foreign exchange reserves position and donations and credit from different donor countries boosted the local currency value versus the dollar. On October 22, the rupee managed to hold on to its overnight levels versus the dollar amid normal business and gained 5 paisas at Rs57.75 and Rs57.80 for buying and selling.
Upward trend in kerb persisted in favour of rupee, which gained 10 paisas in relation to the dollar changing hands at Rs57.65 and Rs57.75 versus the dollar on October 23. On October 24, the rupee continued its upward rising trend against the dollar. It recovered another 7 paisas to trade at Rs57.57 and Rs57.62. High inflow of dollars supported the rupee. During the week the rupee gained 25 paisas against the dollar in the kerb.
Against the euro, the rupee’s weakness persisted throughout the week as investors continued to show interest in the European single common currency. The rupee opened the week with five paisas loss on October 20, with euro seen changing hands at Rs67.20 and Rs67.40. On October 21, the rupee further lost 10 paisas and traded at Rs67.30 and Rs67.50 against the euro. However, it managed to recover 15 paisas on October 22, when euro traded at Rs67.15 and Rs67.35. But the rupee failed to show its firmness versus the euro for more than a day and crossed Rs68 after shedding 75 paisas to trade at Rs67.90 and Rs68.10 on October 23. On October 24, the rupee, however recovered 50 paisas and traded at Rs67.40 and Rs67.60 against the euro. Over the week, the rupee recovered 25 paisas.
Against other major currencies at the inter-bank forex country, the rupee extended gains versus the Hong Kong and Singapore dollars, the Chinese yuan, the Malaysian ringgit, the Korean won and the Thai bhat. It also displayed strength against the Saudi and Qatari riyals, and the UAE dirham. The rupee however, lost ground versus the Canadian, Australian and New Zealand dollars, the Japanese yen, the Danish and Norwegian krones, the Swedish krona and the Kuwaiti dinar.
On the international front, dollar climbed against major rivals on October 20, as investors focused on comments by the US Treasury Secretary that Washington would welcome higher interest rates and was not seeking to weaken the greenback. The remarks rankled the currency markets at the start of the trading day. The comments also sparked some dollar-buying early in the global session, with the US unit rising sharply against the yen and other major currencies before it retraced some of the gains after the US Treasury and the White House clarified Treasury Secretary’s rate comments.
In late New York trading, the dollar was up 0.87 per cent against the yen to 110.24 yen. It hit a high of 110.58 yen following comments. The euro fell as low as $1.1606 but rebounded to $1.1639, off 0.36 per cent on the day. The euro at one point hit nearly a one per cent high against the yen, rising to 128.80 yen before dropping to 128.46 yen. Against the Swiss franc, the dollar was up 0.33 per cent at 1.3318 francs. Sterling also fell against the US currency to $1.6720.
On October 21, the dollar retreated against major rivals in a basically technically-driven session as Market players traded currencies within ranges ahead of key events and economic data next week. Against the yen, the dollar succumbed to a wave of optimism on the World’s second-largest economy as news articles suggested more investments flowing into the Japanese stock market. By late afternoon, the dollar was down 0.8 per cent at 109.50 yen. The euro fell to 127.70 yen, a loss of 0.59 per cent on the day. The euro rose to $1.1661, up 0.28 per cent against the dollar. Against the Swiss franc, the dollar dropped 0.19 per cent to 1.3299 francs. Sterling was trading 0.22 per cent higher versus the dollar at $1.6739, with markets still enamoured with the British currency on rate hike expectations.
Sterling stood near last week’s four-month high against the dollar but failed to extend gains as a key industrial survey painted a mixed picture of Britain’s manufacturing sector. It stood at $1.6740 compared with $1.6702 in late New York on October 20. Against the euro it was steady at 69.70 pence. The dollar stuck to the 109.50-109.60 yen range for most of the session. Some traders suggested that the Bank of Japan, which acts on behalf of the ministry of finance in yen-weakening intervention, may have been fiercely protecting this area, although there was no solid evidence of BoJ buying.
On October 22, the dollar was punished, weighed down by a sell-off in the US stocks after a spate of weak earnings reports and growing expectations of yield-boosting rate hikes by major foreign central banks. The greenback suffered losses of more than one per cent against the euro, the Swiss franc, sterling, the Australian and Canadian dollars. The US Treasury Secretary’s repeated support for a strong dollar policy fell on deaf ears as Markets continued to pummel the greenback on a belief no one in the government. The euro climbed to $1.1807, a gain of 1.20 per cent from previous day’s New York close. The euro also rose against the yen, trading 0.61 per cent higher at 128.53 yen. The dollar fell 0.56 per cent versus the Japanese currency to 108.86 yen. Against the Swiss franc, the dollar fell 1.26 per cent to trade at 1.3133 francs. Sterling hit a five-year high of $1.6934 up 1.12 per cent on the day as talk of a rate hike intensified.
Bank of England minutes released during the day showed policy-makers voted only narrowly to keep rates steady at a meeting earlier this month. Rising commodity prices, part of the global recovery trend, helped push the Australian dollar to a six-year high of US$0.7050.