In the inter-bank market the rupee/dollar parity moved both ways in a narrow range this week.
Increase in demand by the corporate sector kept the rupee under slight pressure on the week’s opening day with the rupee shedding two paisa versus the dollar at Rs57.74 and Rs57.76 for buying and selling. On April 15, the rupee maintained a firm posture, showing no big variations in its overnight levels versus the dollar, which traded at Rs57.74 and Rs57.77. No major demand came in from any sector during the day.
Falling trend prevailed in the inter-bank market on April 16, as both the foreign and national banks bought dollars to cover their payment requirements, resulting in three paisa erosion in the rupee’s value for buying and selling at Rs57.78 and Rs57.79. Dollar demand existed in the market on April 17 due to some corporate payments, which put slight pressure on the rupee. It shed one paisa versus the dollar and traded at Rs57.79 and Rs57.80. On April 18, the rupee remained almost stable versus the dollar at Rs57.78 and Rs57.80 on steady inflows and in the absence of major demand from any quarter. Over the week as a whole the rupee showed a six paisa gain against the dollar in the inter bank market.
The kerb market witnessed a rising trend on April 14, as the local currency gained two paisa in relation to the dollar at Rs57.83 and Rs57.88 for buying and selling. But on April 15, the rupee shed two paisa versus the dollar at Rs57.85 and Rs57.90, amid modest business. On April 16 it extended its overnight weakness and traded at Rs57.90 and Rs57.95, as increase in demand for dollars had pushed the rupee value down. The local currency did not show big change in relation to the dollar there after closing the week unchanged at Rs57.90 and Rs57.95. Over the previous week end close of Rs57.85 and Rs57.90 the rupee this week shed five paisa against the dollar in the kerb. Euro remained preferred currency for local investors although the week commenced on a positive note with the rupee appreciating by five paisa versus the euro for buying and selling at Rs61.90 and Rs62.20, on April 14. It managed to gain another five paisa in relation to the euro and traded at Rs61.85 and Rs62.15 on April 15. However, the local currency lost 65 paisa for buying and selling on April 16 when it traded at Rs62.50 and Rs62.80 against the euro. The single European currency further gained 60 paisa on April 17 when the rupee touched its lowest level during the week at Rs62.90 and Rs63.20. On April 18, the rupee, however, gained 25 paisa in relation to the euro for buying and selling at Rs62.65 and Rs62.95, reflecting 70 paisa depreciation during the week.
In the international financial market the dollar fell modestly on April 14 despite a rally in US stocks, with the market fretting about the US economic outlook as developments in the Middle East lost some of their significance. There was little demand for dollars, even after recent data showing strength in the important US retail sector and the strong bank earnings.
In late New York trading, the dollar was off three-tenths of a per cent against the euro at $1.0780 per euro but off session lows of $1.0810 touched earlier in the day. It slipped four-tenths of a per cent versus the Swiss franc to 1.3885 francs. Against the yen, the dollar was down 0.25 per cent at 120.22 yen. The dollar showed some strength against the commodity currencies, holding steady versus the Canadian dollar at C$1.4533 while the Australian dollar was little changed versus the US dollar at 60.50 US cents.
Sterling gained a little on the dollar but relinquished some ground to the euro as a mild rally in US stocks failed to support the greenback. It traded down 0.10 per cent on the day against the euro at 68.49 pence, giving back gains scored in early session. It was up 0.17 per cent on the dollar at $1.5750. US stocks eked out gains in early New York trade but the dollar was still disappointed, shedding more than a third of a per cent against the euro during the early New York session.
On April 15, the dollar slipped against the euro and was narrowly mixed against most other major counterparts, as traders brooded on hints of a lacklustre outlook for the US economy. A rebound in the US stocks helped lift the dollar off the day’s lows, with the Dow Jones Industrial Average finishing up 0.6 per cent.
The US dollar was down about 0.2 of a per cent against the euro, with each euro buying $1.0795. The dollar was moderately up against the Swiss franc at 1.3920 francs. It was flat against the yen at 120.28 yen. The Canadian dollar has been on the rise versus the US dollar because of expectations of a widening rate differential, which is encouraging global fixed income investors to buy the Canadian sovereign. The US dollar was buying C$1.4501, down from C$1.4535.
Sterling had lost half a per cent against the euro to 68.76 pence from 68.42 in late New York. Against the dollar it stood at $1.5716 compared with $1.5738, within a recent range.
The dollar slid sharply on April 16, bruised by tumbling equity markets and a deepening sense of worry about US economic prospects, though thin pre-holiday trading conditions exacerbated the weakness.
In New York, the dollar was trading at $1.0914 per euro, down 1.1 per cent. Against the Swiss franc, the dollar slid 1.6 per cent at 1.3701 francs. It was down 0.64 per cent against the yen at 119.48 yen. The pound rose above $1.5770 in late European trade to its highest in nearly two weeks. Against the euro, it was slightly weaker at 68.84 pence but well within recent ranges.
The dollar turned a retreat into a modest advance on April 17. Until its modest rally the dollar had fallen against the euro every day this week. That left the single currency hovering at a key area between $1.0880 and $1.0890. The euro tested four-year highs against the yen around 130.80 briefly in Asian trade on April 16. On April 17 in New York, it was trading at 130.09 yen, down 0.27 per cent.
However, the dollar was trading at 119.60 yen a touch higher than 119.54 yen on April 16. Against the Swiss franc, the dollar rose 0.8 per cent to 1.3816 francs. The euro slipped below the $1.0900 mark, buying $1.0873, down 0.3 per cent.
Sterling remained trapped near four-year lows against the euro. The euro rose as high as 69.34 pence but failed to gather enough momentum to push through the four-year high of 69.39 pence it set last week it was trading higher on the day at 69.12 pence. Against the dollar, sterling advanced as far as $1.5844, a one-month high, as the dollar was generally on the backfoot on worries about the US corporate and economic health. Later it erased gains to $1.5782. The US currency traded in a tight 119.58-119.81 yen range in Tokyo with many players absent due to the Easter holidays. US markets resume trading on April 21, while other centres, including London, will be closed on that day as well.
The week closed with dollar trading at 119.73 yen compared to previous day’s US l level of around 119.60. The greenback briefly dipped to a two-week low of 118.92 in Tokyo during the day on lingering doubts about the US economy. The euro was little changed at $1.0885 against around $1.0880 in late New York, still off its one-month high of $1.0975 hit on April 17. The single currency rose to 130.34 yen from around 130.15 in late New York and edged towards the four-year high of 130.78 hit a day earlier.