Dollar slides

IN the local currency market, calm prevailed in the absence of major activity. Dollar supplies were sufficient to meet market demand this week.

However, the rupee came under extended pressure against euro which crossed Rs122 barrier during the week. In the inter-bank market, the rupee showed all round gains versus dollar this week.

On the opening day, dollar traded at Rs85.38 and Rs85.42 after the rupee picked up two paisa on the buying counter and another three paisa on the selling counter over previous week close of Rs85.40 and Rs85.45. The rupee further posted fresh gains of 12 paisa on the buying counter and 11 paisa on selling counter on April 5, changing hands against dollar at Rs85.26 and Rs85. On April 6, the rupee overnight firmness persisted versus dollar as the parity continued its upward advances forcing dollar to shed 11 paisa on the buying counter and 12 paisa on selling counter at Rs85.15 and Rs85.19. Another 31 paisa rise in rupee value on April 7 pushed the dollar to the week’s lowest level at Rs84.84 and

Rs84.88. Rising trend persisted in the last trading session. The rupee extended further gains versus dollar and was up two paisa for buying and 3 paisa for selling at Rs84.82 and Rs84.85 at the close of the week.

This resulted in overall increase of 58 paisa in rupee value against inter-bank dollar this week.

In the open market, continuous healthy dollar inflows amid low demand helped the rupee strengthened versus US currency this week. The week commenced on a dismal note as the rupee shed five paisa against the dollar and traded at Rs85.20 and

Rs85.40 on April 4, after ending last week at Rs85.15 and Rs85.35. It, however, assumed upward rising trend against the dollar in the rest of the week. The rupee gained 5 paisa and traded at Rs85.15 and Rs85.35 on April 5.

Another eight paisa gain on April 6 helped the rupee extend its overnight firmness versus dollar which was seen trading at Rs85.07 and Rs85.27 at the end of the third trading session. On April 7, the rupee further strengthened against the dollar as it appreciated for the third successive day, trading up seven paisa at Rs85.00 and Rs85.20.

Finally in the last trading session on April 8, the rupee/dollar parity closed the week in positive mode with the rupee further picking up 10 paisa in relation to dollar which traded at Rs84.90 and Rs85.10. This week, the rupee in the open market posted 25 paisa rise against US currency.

Versus euro, the rupee showed a fluctuating trend this week. It came under mounting pressure against euro and breached Rs122 barrier, despite resistance.

The week commenced in a negative mode with the rupee trading against euro at Rs120.74 and Rs121.24 in the first trading session, 20 paisa lower against last week close of Rs120.54 and Rs121.04.

In the second trading session, however, the rupee managed to stage a recovery against euro. It traded 30 paisa lower at Rs120.44 and Rs120.94.

The rupee further depreciated in relation to euro in the third trading session. It traded down 98 paisa at Rs121.42 and Rs121.92.

In the fourth trading session, the rupee, however, managed to recover 60 paisa on the buying counter and another 56 paisa on the selling counter with euro trading at Rs120.86 and Rs121.36. But in the last session, the rupee crossed Rs122 barrier after it shed 75 paisa in relation to euro, hitting the week’s lowest level at Rs121.61 and Rs122.11 on April 8. During the week in review, the rupee in the open market lost Rs1.07 on cumulative basis against the European single common currency.

On the international front, the euro on the opening day of the week hovered near a five-month peak against the dollar and an 11-month high against the yen.

The single currency last traded at $1.4217, down 0.1 per cent. Against the Japanese currency, the dollar was flat at 84.03 yen. It hit its highest level since September on last weekend, stalling ahead of an option barrier at 84.75. Against the dollar, sterling was up 0.2 percent at $1.6138 in London trade. It was not far from a high of $1.6176 hit earlier in the day, its strongest since March 24. On April 5, the euro neared a recent five-month peak on expectations of rising euro-zone interest rates. Against the dollar, the euro was flat at $1.4221, just below a session high of $1.4245 and near a five-month high of $1.4268 touched on April 4.

The dollar rose 0.9 per cent to 84.82 yen, having hit as high as 84.90 yen, a more than six-month high. Sterling rallied to a two-week high against the dollar in London trade.

It rose nearly 0.9 percent to a two-week high of $1.6279. On April 6, the euro retreated slightly at $1.4332 from $1.4220 a day earlier after hitting a 15-month high against the dollar but it still remained higher in late New York trading where it traded as high as $1.4349, its strongest level since January 2010.

The dollar was mixed in other trading, rising against the yen but slumping against most other major currencies around the world.

The dollar fetched 85.40 yen, up from the previous week close of 84.82 yen. In London, the pound hit a session low at $1.6257. It was last 0.1 per cent lower on the day against the dollar at $1.6280.

On April 7, the euro fell from a 14-month high against the dollar after the head of the European Central Bank dampened market expectations for aggressive interest rate hikes. In late New York trading, the euro was last down 0.3 per cent at $1.4292, off a more than 14-month high of $1.4350 touched a day earlier. Against the yen, the dollar fell to a session low of 84.57 yen after news of the latest earthquake in Japan. It was last at 84.88 yen, down 0.7 per cent. In London, sterling was down 0.2 per cent at $1.6296. At the close of the week on April 8, the euro rose to a 15-month high against the dollar since January 2010. The euro was also helped by reported Middle East sovereign demand.

It was up 0.9 per cent at $1.4432 with a session peak of $1.4444. Against the yen, however, the dollar rose 0.3 per cent trading at 85.28 yen, near a six-month high of 85.53 hit earlier this week.