The modest increase in remittances, exporters selling, and smooth supply of dollars enabled the rupee to stabilise versus the dollar last week.
It also trimmed some losses versus the euro on rising speculations that the European Central Bank might cut interest rate in the near future, experts said.
In the kerb market, the rupee picked up 25 paisa versus the dollar for buying and selling at Rs 57.27 and Rs 57.33, respectively, while versus the euro, the rupee lost 90 paisa for buying and selling at Rs 71.91 and Rs 72.21.
Range-bound trading was seen in the inter-bank market, as the rupee almost traded in a band of Rs 57.34 and Rs 57.37 on balanced demand and supply position of dollars.
Commenting on the rupee's firmness in the coming days, analysts said the rupee may hold
its present levels versus the dollar due to the precautionary measures of the State Bank of Pakistan (SBP). After observing a rise in inflation, the SBP last week vowed to keep inflation in check despite an unusual increase in the currency circulation.
According to a report, the first half of the current fiscal year, inflation shot up to 3.08 percent against the full year target of 3.9 percent due to unprecedented rise in currency in circulation.
Experts said the rupee might maintain its firmness versus the dollar due to its excess supply in the market.
Explaining the dollar's future outlook, several overseas analysts observed that the dollar is likely to face more erosion ahead of Group of Seven (G-7) meeting.
The dollar in the international markets showed mixed trend versus the leading currencies on capital inflows to US asset, dealers said, adding it, however, could not sustain its present levels ahead of G-7 meeting.
Currency analysts also said that the rupee would gain more strength if remittances showed rising trend in the coming days.
At the weekend, profit-taking in the euros trade, hurts its firmness, losing handsome ground versus the dollar in the world markets, dealers said.
They attributed the euro's slide to speculations that the euro zone ministers in Group of Seven (G-7) meeting next month will say that further strength in the euro could cause the European Central Bank (ECB) to cut interest rates.
As a result, the single European currency lost around one percent against the dollar on Friday, they added.
KERB MARKET RATES: On Monday, the rupee recovered three paisa in relation to the dollar for buying and selling at Rs 57.52 and Rs 57.57, respectively.
The rupee gained slightly due to improved supply of dollars and its weak demand in the inter-bank market, dealers said.
The rupee also picked up 20 paisa in relation to the euro for buying and selling at Rs 70.98 and Rs 71.28 on declining its value in the world markets, currency analysts said. On Tuesday, the rupee lost 80 paisa versus the euro for buying and selling at Rs 71.80 and Rs 72.10.
The rupee lost handsome ground on the euro's recovery versus the major currencies in the world markets.
In the international markets, the single European currency recovered some losses versus the greenback, gaining one percent at 1.2485 dollar.
The rupee, however, did not show any major variation in terms of the dollar for buying and selling at Rs 57.52 and Rs 57.58, dealers said.
On Wednesday, the rupee continued its weakness versus the euro, shedding nearly one rupee for buying and selling at Rs 72.74 and Rs 73.05, respectively.
Last week, the single European currency lost nearly Rs 3.60 to touch the low level at Rs 70.98 versus the rupee, moneychangers said.
The rupee firmed versus the greenback on the dollar's balanced demand and supply position at Rs 57.52 and Rs 57.57 in process of trading.
The smooth supply of the dollars would help the rupee to gain versus the it in the near future, they added.
Money experts also said due to easy supply of dollars, the Indian rupee touched the new high at Rs 45.40 against the dollar on Wednesday, following the news that the Fitch Ratings upgraded country's long-term foreign currency rating to 'BB+' from 'BB'.
They hope that Indian rupee may gain slightly ahead of general election despite solicitous watch by the Reserve Bank of India (RBI).
In the world markets, the dollar failed to hold its firmness versus the major currencies, dealers said.
On Thursday, the rupee recovered five paisa against the dollar at Rs 57.42 and Rs 57.52 on easing supply of the greenback, dealers said.
Moneychangers said the rupee would gain more strength versus the dollar as overseas Pakistani to visit their homeland to celebrate Eid-ul-Azha with their relatives.
They would bring dollars for their requirements, which will help the rupee recover more ground. Additionally, remittances and exporters' selling could be one of the factors of a firmer rupee, they added.
The rupee halted further erosion versus the euro for buying and selling at Rs 72.71 and Rs 73.00, dealers said, adding the rupee may not maintain its firmness as the single European currency is gaining its strength versus the major currencies in the world markets.
In the international markets, the euro depicted modest gains versus the dollar ahead of the Group of Seven (G7) meeting.
Market players are anticipating that the European leaders are likely to issue a joint statement to bring out the dollar from the dragging position.
On Friday, the rupee extended its winning streak for the second day, picking up two paisa more versus the dollar for buying and selling at Rs 57.40 and Rs 57.45, respectively.
It, however, lost 30 paisa versus the euro for buying and selling at Rs 73.00 and Rs 73.35, respectively. At the weekend, the rupee managed to gain further 15 paisa versus the dollar for buying and selling at Rs 57.27 and Rs 57.33, respectively.
The euro fell sharply in the local market, losing Rs 1.12 for buying and selling at Rs 71.91 and Rs 72.21, respectively.
INTERBANK RATES: The whole week, the rupee's movement was range-bound within a band of Rs 57.33 and 57.38 versus the dollar in the absence of major demand by the banks.
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