THE RUPEE: dollar gains

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Weekly Updates - Rupee in a flash

The dollar managed to maintain an upward trend against the rupee on the currency market, ended the shortened week on February 9. The banks were closed on account of Kashmir Day holiday on Tuesday. On the interbank market, the rupee lost 19 paisa in relation to the dollar for buying and selling at 97.95 and 97.99.

On the open market, the rupee adopted the same pattern against the dollar, losing 40 paisa for buying and selling at 99.70 and 99.90, the national currency also slid versus the euro, dropping Rs 1.8 to Rs 133 and Rs 134.

Outflows of dollars and falling trend in inflows made the rupee unable to hold its firmness versus the greenback, besides deteriorating law and order situation is a major reason behind the fall in Foreign Direct Investment (FDI).

Local investors or importers were covering forward purchasing of dollar to keep themselves away from big losses, leading money experts said.

INTER-BANK MARKET RATES: On Monday, the rupee drifted lower versus the dollar as it shed three paisa for buying at 97.76 and it also fell by four paisa for selling at 97.80. On Tuesday, currency markets were closed due to Kashmir Day holiday.

On Wednesday, the rupee shed seven paisa versus the dollar for buying at 97.83 and the national currency was down by six paisa for selling at 97.86. On Thursday, the rupee depreciated by nine paisa in relation to the dollar for buying and selling at 97.92 and 97.95. On Friday, the rupee shed three paisa versus the dollar for buying at 97.95 and national currency also dropped by four paisa for selling at 97.99.

OPEN MARKET RATES: On February 4, the rupee managed to gain 10 paisa versus the dollar for buying and selling at 99.30 and 99.50. The rupee also picked up 20 paisa in relation to the euro for buying and selling at Rs 134.80 and Rs 135.80.

On February 5, the market was closed, while on February 6, the rupee lost 30 paisa against the dollar for buying and selling at 99.60 and 99.80, they said. The rupee, however, gained 30 paisa versus the euro for buying and selling at Rs 134.50 and Rs 135.50, they added.

On February 7, the rupee managed to hold overnight levels versus the dollar for buying and selling at 99.60 and 99.80, they said. The rupee gained 20 paisa in relation to the euro for buying and selling at Rs 134.30 and Rs 135.30, they said. On February 8, the rupee also fell by five paisa in relation to the dollar for buying and selling at 99.65 and 99.85. The rupee gained 20 paisa in relation to the euro for buying and selling at Rs 134.30 and Rs 135.30.

OPEN MARKET RATES: The rupee shed five paisa in relation to the dollar for buying and selling at 99.70 and 99.90, they said. The rupee followed the same pattern in terms of the euro, losing 1.3 for buying and selling at Rs 133 and Rs 134, they said.

OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, the yen steadied slightly off a 2-1/2-year low against the dollar on Monday as option-related buying prompted short-term players to refrain from testing the Japanese currency's downside for now.

Sentiment toward the yen remained bearish, however, as the Bank of Japan was expected to remain under the most pressure among major central banks to ease policy aggressively.

The dollar was trading against the Indian rupee at Rs 52.97, the greenback was at 3.0955 in terms of the Malaysian ringgit and the US currency was at 6.2300 versus the Chinese yuan. Inter bank buy/sell rates for the taka against the dollar on Monday: 79.16-79.18 (79.20-79.20) Call Money Rates: 08.50-08.50 percent (previous 07.50-08.50 percent).

In the second Asian trade, the euro extended losses as political uncertainty in Italy and Spain prompted traders to take profits on the currency's stellar gains so far this year, after it hit a 14-month high last week.

That also helped to ease selling pressure on the yen slightly, lifting it above a 33-month low against the dollar, though entrenched expectations of more monetary easing in Japan kept the Japanese currency in check. The dollar was trading against the rupee at Rs 53.29, the greenback was at 3.0855 in terms of the Malaysian ringgit and the dollar was at 6.2286 versus the Chinese yuan. Inter bank buy/sell rates for the taka against the dollar on Monday: 79.11-79.14 (79.16-79.18). Call Money Rates: 06.50-08.00 percent (previous 06.00-08.00 percent).

In the third Asian trade, the yen plunged to its lowest level in nearly three years against the dollar in Asian trade on Wednesday after the Bank of Japan's chief said he would quit early, fuelling more easing speculation.

The Japanese unit fell to 93.97 against the dollar in Tokyo afternoon trade, its lowest level since May 2010, and down from 93.61 in New York Tuesday.

The euro also racked up gains at 127.60 yen from 127.13 yen in New York and 124.63 yen on Tuesday in Asia.

In the fourth Asian trade, the euro fell against the dollar and a resurgent yen, while sterling wallowed at multi-month lows as cautious investors' awaited outcomes of central bank policy meetings in Europe and Britain.

Both the European Central Bank and Bank of England are widely expected to keep interest rates unchanged later on Thursday, but any dovish hints could put both currencies under pressure.

The dollar was trading against the Indian rupee at Rs 53.30, the US currency was at 3.0940 in relation to the Malaysian ringgit and the greenback was available at 6.2340 in terms of the Chinese yuan. Inter bank buy/sell rates for the taka against the dollar on Thursday: 79.02-79.05 (79.07-79.11). Call Money Rates: 06.00-08.00 percent (previous 06.00-08.00 percent).

In the final Asian trade, the euro hovered near a two-week low after the European Central Bank chief hinted at concern about the impact of the currency's recent strength on the economy, in remarks that analysts said went further than they had expected. Mario Draghi said on Thursday that the exchange rate is important for growth and price stability and that he wants to see "whether the appreciation is sustained and will alter our risk assessment."

The euro traded at $1.3410, close to its late US levels after having fallen 0.9 percent on Thursday, when it briefly dropped as low as $1.33705, the lowest since January 25.

The dollar was trading versus the Indian rupee at Rs 53.60, the greenback was at 3.0985 in terms of the Malaysian ringgit and the US currency was at 6.2350 in relation to the Chinese yuan. At the week-end, the yen jumped on Friday after Japan's finance minister said the currency's recent drop had gone too far, too fast and doubts crept in about whether the next governor of the Bank of Japan will ease policy aggressively.

The yen, which fell to its low against the euro since April 2010 and its lowest against the dollar since May 2010 on Wednesday, got a boost from Finance Minister Taro Aso's comments that the yen's slide from 78 to 90 per dollar was steeper than intended.


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