MIXED sentiments were observed in the local currency market this week with the rupee trading both ways versus dollar and other major currencies.
After hitting historic lows versus the dollar and euro in the third week of September, the rupee rebounded sharply following SBP intervention in the last week of September to stop further declines in its value by making available additional dollars to the forex dealers in the local market.
The central bank timely intervention eased the pressure on the rupee in the week ended October 3. The rupee had so far fallen by 3.3 against the dollar and 4.8 per cent against euro between January and October this year. As a result of last week SBP move to stabilize the currency, minor changes were observed this week in the currency market.
On the inter-bank market this week, the rupee inched one paisa lower against dollar on the buying counter while retaining weekend level on the selling counter, changing hands at Rs87.45 and Rs87.49 in the week’s opening trading session.
Upward movement persisted in the rupee/dollar parity in the second trading session when the rupee rose sharply by 21 paisa and traded against the dollar at Rs87.24 and Rs87.28. On the following day, the rupee did not show any change in its overnight level on the buying counter but it inched down by one paisa on the selling counter, trading against the dollar at Rs87.24 and Rs87.29 at the close of the third session.
In the fourth trading session, however, the rupee holding firm ground versus dollar picked up nine paisa before closing at Rs87.15 and Rs87.20.
However, it gave up overnight firmness in relation to the dollar in the last trading session, losing 9 paisa on the buying counter and another 7 paisa on the selling counter to close the week at Rs87.24 and Rs87.27 amid strong demand for the greenback on October 7. On cumulative basis, the rupee in the inter-bank market managed to gain 20 paisa against the dollar during this week.
In the open market, the rupee this week traded in narrow ranges. It commenced the week on a positive note on October 3, picking up 10 paisa in relation to dollar on the buying counter while retaining its weekend level on the selling counter to trade at Rs88.20 and Rs88.70 in the first trading session.
Last week, the market had closed at Rs88.30 and Rs88.70. On October 4, the rupee maintained it upward movement versus US currency, climbing further by 20 paisa on the buying counter and another 30 paisa on the selling counter to close the second trading session at Rs88.00 and Rs88.40.
However, after gaining 30 paisa against the dollar in the first two trading sessions, the rupee could not retain its firmness in the third trading session and shed 20 paisa at Rs88.20 and Rs88.60 on October 5. The rupee continued its downslide in the fourth trading session when it depreciated by 10 paisa, pushing greenback on October 6 to trade at previous weekend’s levels of Rs88.30 and Rs88.70.
Finally, the week ended on a negative note as it further shed 10 paisa in the last trading session, pushing dollar to the week’s highest levels at Rs 88.40 and Rs 88.80 on October 7. During this week, the rupee in the open market posted a net loss of 10 paisa against the greenback.
Versus the European single common currency, the rupee remained fluctuated in narrow ranges this week. It shed 14 paisa in the first trading session and traded at Rs119.05 and Rs119.55 on October 3, after closing last week at Rs118.91 and Rs119.41.In the second trading session, the rupee managed to rebound sharply against its overnight losses, recovering Rs2.26 in the single day trading to touch the week’s highest level at Rs116.65 and 117.15.
The rupee, however, trimmed overnight gains versus euro suffering losses to the tune of Rs1.60 in the following two trading sessions. It shed 66 paisa and traded at Rs117.31 and 117.81 in the third trading session and then further posted 94 paisa loss in the fourth trading session, when euro was seen changing hands at Rs118.25 and Rs118.75.In the last trading session, the rupee further lost 93 paisa before closing the week at Rs119.18 and Rs119.68 in relation to euro. On week over week basis, however, the rupee this week suffered a net loss of 27 paisa against euro
On the international front, the euro fell to its lowest level in more than eight months against the dollar on the opening day of the week in review, posting its largest one-day loss since September 9. In late New York trading, the euro was down 1.5 per cent at $1.31919. Against the yen, the dollar eased 0.6 per cent to 76.620 yen, after hitting a two-week high at 77.27 yen.Sterling fell against the dollar in late London trade and traded 0.7 percent lower on the day at the day’s trough of $1.5453.
On October 4, the euro rallied from a near nine-month low against the dollar, rising as high as $1.3370. It last traded at $1.3342, up 1.3 per cent, its largest one-day gain since mid-August. The greenback was little changed against the yen at 76.68 yen. Sterling fell towards its lowest in 13 months against the buoyant dollar in London, down 0.5 per cent at $1.5351, not far from its recent low of $1.5326 which was its lowest level since early September 2010.
On October 5, the euro rose against most currencies and was flat at $1.33470 on electronic trading platform EBS and at least more than a cent higher from the day’s low of $1.32600 and two cents more than previous day’s nine-month trough at $1.31450. The dollar rose to a session peak of 77.070 yen on EBS and was last at 76.750 yen, down 0.1 per cent. Sterling was down 0.3 per cent on the day at $1.5438, having climbed to around $1.5474 from $1.5439.
On October 6, the euro rallied against the dollar for a third day, up 0.7 per cent against the dollar at $1.34350 and just off a session high at $1.34510, but well off a low of $1.32415. Against the yen, the dollar dipped 0.2 per cent to 76.63 yen.
At the close of the week on October 7, the euro fell against the dollar, down 0.3 percent at $1.3403.