Continued easy supply of dollar strengthened the rupee on August 23. The rupee did not show any change versus the greenback on the week’s second day, as it remained traded at Rs59.68 and Rs59.69. On the third day of the week in review, the rupee firm trend versus the dollar persisted. The parity stood at its overnight levels of Rs59.68 and Rs59.69 on August 24.
Low demand and easy supply of dollar on August 25 helped the rupee gain two paisa in relation to the dollar for buying and one paisa for selling. The dollar, on the day, was seen changing hands at Rs59.66 and Rs59.68. On August 26, steadier trend was witnessed as the rupee remained unmoved versus the dollar. It also remained unchanged over last weekend’s levels of Rs59.66 and Rs59.68.
In the open market, the rupee gained five paisa in relation to the dollar on August 22, over its previous week close to trade at Rs60.10 and Rs60.20. On August 23, the rupee managed to gain five paisa more for buying, while it did not show any change for selling, trading at 60.05 and at Rs60.15.
On August 24, firmer trend was observed in the open market. Improved supplies by the exporters helped the rupee maintained its overnight levels versus the dollar, which traded unchanged. The rupee did not fluctuate sharply versus dollar on the fourth day. It, however, lost two paisa for buying but remained unmoved for selling, changing hands at Rs60.07 and Rs60.15 on August 25.
On August 26, the rupee picked up two paisa versus the dollar on the buying side to trade at Rs60.05 while it remained unchanged at Rs60.15 for selling. Over the previous week close the open market parity, however, depicted ten paisa gain in favour of rupee this week. The dollar was at Rs60.15 and Rs60.25 last weekend.
On August 24, the rupee showed firmness against euro and gained 10 paisa to trade at Rs72.70 and Rs73.00. On August 25, the euro appreciated versus the rupee gaining 50 paisa to trade at Rs73.30 and Rs73.50. The euro has been gaining ground since the news that Germany’s ZEW investor confidence indicator had shot up to 17-month high.
The single European currency was able to maintain its rise on its appreciation in the world markets on August 26. As a result, the euro expanded its ground versus the rupee in the local currency market, picking up 30 paisa for buying at Rs73.60, and gaining 40 paisa for selling at Rs73.90 against the last week’s Rs72.75 and Rs73.00. The rupee this week lost 85 paisa for buying and 90 paisa for selling versus the European single common currency in the open market.
In the world markets, the dollar failed to make any clear-cut direction in the absence of fresh leads on August 22. The dollar fell with a broadly stronger Japanese yen spilling over into other currencies and prompting dealers to sell the greenback across the board to lock in profits from last week’s steep gains. The dollar fell 0.7 per cent against the yen to 109.68 yen as foreign funds piled into Tokyo stocks amid optimism about Japan’s economy. Its softness against the yen helped push the euro back up toward an important technical area of $1.2250-60.
In late New York trading, the euro rose 0.6 per cent against the dollar to $1.2227. The dollar slid 0.4 per cent against the Swiss franc to 1.2701 francs, while sterling rose 0.3 per cent to $1.8005.
On August 23, the dollar drifted slightly lower against the euro, but remained trapped within summer trading ranges with few prospects for a near-term breakout. The euro ticked up to $1.2235, up 0.1 per cent compared with late August 22. The unit has spent the last two months trading between roughly $1.1865 and $1.2485.
Against the Japanese yen, the dollar started the session above 110 yen, but then lost steam, giving up gains to trade flat on the day at 109.76 yen. Against the Swiss franc, the dollar was relatively unchanged at 1.2708 francs, while sterling was flat at $1.8007.
Throughout the first half of 2005, the dollar was supported by higher interest rates and more solid economic growth prospects compared with other major industrialised economies. Solid technical resistance in the $1.2250-60 area and reported good buying interest just below $1.2200 is keeping the euro well-shackled as range bound trading is being mirrored across the board.
On August 24, the dollar slipped against the euro after a weak report on the US orders for durable goods shook the conviction of traders who had made short-term bets on the US currency. Later in the session, traders were probing the market for automatic stop-loss buy orders in the euro, hoping for acceleration in the move which would squeeze out bets against the euro zone currency.
By late afternoon, the euro was up 0.4 per cent to $1.2275, nearly revisiting a high of $1.2280 reached just after the durable goods data. The dollar clung to small gains against the yen, at 110.17 yen, up 0.2 per cent. The yen struggled broadly after rallying this month on optimism about Japan’s economy.
Trading conditions were thin, with some dealers’ positions only a third of their normal size, on August 25. The dollar sagged broadly as traders continued to lighten their bets on further strength in the currency, ahead of what is expected to be a risk-prone September.
The euro rose for the fourth consecutive session, up 0.2 per cent to $1.2296. It retraced the prior week’s losses but came up short of reported automatic stop-loss buy orders around $1.2330 and chart resistance at $1.2350.
The dollar’s losses were biggest against the Swiss franc, with the US currency down 0.6 per cent at 1.2567 francs. The dollar eased against the yen at 110.06 yen. Sterling’s rise, up 0.1 per cent, was limited and seemed capped at around $1.8027 by a fairly buoyant euro/sterling.
At the close of the week on August 26, the dollar was confined to tight ranges as many market players refrained from making big bets ahead of a series of potentially market-moving events in September.
The dollar fetched about 110.05 yen, little changed from late US levels. It was well above a seven-week low near 109.05 yen hit in mid-August and in the middle of the range of 109-111 in which it has drifted for the past two weeks.
The euro was barely changed against the dollar at $1.2315. Against the Japanese currency, it was around 135.50 yen. Sterling traded 0.2 per cent higher on the day against the dollar at $1.8071.