IN the local currency market, the rupee/dollar parity has remained range-bound since past few weeks. This week, the dollar supply remained sufficient. The inter-bank market witnessed a steadier trend on the week’s opening day. Amid smooth dollar supply, the rupee picked up three paisa on March 14, changing hands at Rs59.32 and Rs59.34 versus the dollar. Exporters’ selling boosted the rupee versus the US currency. On March 15, rising oil prices in the world markets pushed the import payments higher, increasing the dollar demand. The rupee shed three paisa against the US currency on improved demand for oil payments. The rupee reverted to its previous week end position, traded at Rs59.35 and Rs59.37 versus the dollar.
On March 16, the rupee drifted slightly versus the dollar, amid a slightly firmer trend in the inter bank market. The rupee traded at Rs59.36 and Rs59.38 after it shed one paisa versus the dollar. The rupee further shed one paisa for buying and two paisa for selling on March 17, changing hands at Rs59.37 and Rs59.40 against the US currency, on sharp increase in oil prices.
Dollars’ demand persisted by the major banks to meet the imports payments on March 18, necessitating marginal adjustment in the value of the dollar in the inter-bank market. The rupee lost one paisa for buying but remained unchanged for selling to trade at Rs59.38 and Rs59.40. During the week, the rupee thus lost three paisa against the dollar. The parity in the inter bank had closed at Rs59.35 and Rs59.37 last week.
In the open market, the rupee managed to hold its previous weekend’s levels versus the dollar on March 14, changing hands at Rs59.50 and Rs59.55. It did not show any change versus the dollar on March 15, and traded unchanged for the second consecutive day at Rs59.50 and Rs59.55.
The rupee/dollar parity in the open market remained stable for the third day in a row on March 16. It, however, shed two paisa against the dollar on March 17, the first decline this week to trade at Rs59.52 and Rs59.57. The parity maintained its overnight levels on March 18, trading unchanged at Rs59.52 and Rs59.57. The rupee in the open market, however, depicted a fall of two paisa versus the dollar over the previous week close.
Against the Euro, the rupee, however, gave up last weekend’s slide and recovered 15 paisa in relation to trade at Rs79.60 and Rs79.90 on March 14. The rupee further extended its overnight gains by gaining 30 paisa against the euro on March 15, to trade at Rs79.30 and Rs79.60. It remained unchanged on March 16.
The rupee failed to hold its overnight firmness versus the European single common currency on March 17, losing 35 paisa at Rs79.65 and Rs79.95. The rupee, however, gained 25 paisa against the euro on March 18, trading at Rs79.65 and Rs79.95. Over the previous week, the rupee gained ten paisa this week versus the euro.
In the international financial markets, the dollar climbed steeply against the yen and gained against most other currencies on March 14, as investors bought the greenback. Some analysts said short-term, speculative investors took profits in other currencies, driving the dollar higher. Data showing the US trade deficit widened in January to $58.3 billion, the second-highest monthly total on record caused investors to scramble to sell dollars ahead of the weekend.
In New York the dollar was up 0.9 per cent against the yen at 104.88 yen. The euro fell 0.6 percent to $1.3369. Selling by Japanese investors and importers against the dollar and the euro added to the yen’s losses, as did selling by option players and speculators wanting to lock in profits. Sterling slipped against the dollar. It extended early losses to stand down half a per cent on the day at $1.9150, moving away from last week’s 2-1/2 month high.
The dollar firmed against the euro on March 15, after a report showed robust foreign net purchases of the US assets in January that amply offset the nation’s wide monthly trade deficit. The euro slipped below $1.3300 from around $1.3400 shortly before the January portfolio flows report.
In late New York trade, the euro was trading at $1.3304, down 0.5 per cent from its levels late on March 14. Against the yen the dollar was trading at 104.55 yen, down 0.3 per cent. The dollar was at 104.18 shortly before the capital flow report.
Against the Swiss franc, the dollar traded at 1.1654 francs, up 0.5 per cent. Sterling was down 0.1 per cent at $1.9114.
On March 16, the dollar dropped after news the US current account deficit widened to a record level and oil prices surged to new highs, a sign the already huge deficit may get even bigger. The current account gap widened more than expected in the fourth quarter to a record $187.9 billion, driving the full-year gap to a new high of $665.9 billion.
That news was enough to turn investors away from the dollar, then the US crude futures jumped more than $1 to a record high, settling at around $56.46 a barrel. The dollar sagged to session lows with oil prices and current account and trade deficits at a new record.
In late New York trade, the euro was up 0.8 percent at $1.3414, compared with $1.3375 just before the current account report. Earlier, the euro hit a one-week low of $1.3292 in Asia but traded as high as $1.3438. Against the yen the dollar was down 0.3 per cent to 104.15, but off a low of 103.91 yen.
The yen was bolstered overnight by the Bank of Japan upgrading its assessment of the economy slightly even as it kept monetary policy unchanged. The dollar fell one per cent against the Swiss franc to 1.1526 francs, while sterling also gained at the dollar’s expense, rising 0.7 per cent to $1.9256.
On March 17, the dollar strengthened, largely on an early sell-off in emerging markets that sent investors into the US Treasuries, but the currency’s gains were limited by a soft US business survey. The Polish zloty and other emerging European currencies led the sell-off earlier in the global session as a bout of risk aversion prompted investors to unwind long positions built up in those currencies over recent months.
The euro was 0.3 per cent weaker at $1.3374 in late New York trade, while the dollar was up 0.4 per cent against the Japanese currency at 104.53 yen. The dollar also gained 0.4 per cent against the Swiss Franc at 1.1568 francs after the Swiss National Bank kept interest rates on hold.
Sterling was a touch weaker at $1.9237.The dollar also gained support from some investors who bought back into the currency on the expectation that the steep fall in the previous session, triggered by a record US current account deficit, was overdone.
At the close of the week on March 18, the dollar edged higher, extending the previous day’s gains as investors pondered whether an upcoming Federal Reserve policy meeting would point to interest rates climbing at a faster pace. The dollar fetched around 104.80 yen versus 104.53 yen in late US trade and near previous day’s high of 104.90 yen. The euro eased to around $1.3365, from $1.3375 in late US trade.