The rupee played on the both sides against the dollar and euro amid post budget sessions in the week ending on June 16, 2007. In the interbank market, the rupee commanded its position boldly against the dollar, rising six paisa for buying and selling at 60.59 and 60.61, dealers said.
The rupee, however, could not retain its ride over the dollar and the euro in the open market, they said. Against the greenback, the rupee slid against the dollar for buying at 61.00 and dropped by 12 paisa for selling at 61.10, they said. It lost 30 paisa in relation to the single European currency for buying and selling at Rs 81.45 and Rs 81.55, respectively.
In fact, the rupee struggled hard to maintain its level against the dollar despite the asking demand by the importers for the US currency, money experts said. Somehow, it resisted sharp erosion due to high inflows of dollars as the remittances touched nearly five billion dollars mark during the eleven months of the out-going fiscal year, they observed. According to the news report, the country received inflows mainly from the UAE, Saudi Arabia, USA, UK and EU countries.
The healthier trend in the remittances, Foreign Direct Investment (FDI) and proceeds from the recently launched Pakistan Euro bonds in the international financial markets, pushed the foreign exchange reserves position higher-than-expected, hitting the new high at 15,030.1 million dollars.
Country's foreign exchange reserves on June nine 2007, crossed the 15 billion dollars mark for the first time, thanks to healthy growth in external inflows, observers said.
Last week, Prime Minister's Advisor on Finance, Dr Salman Shah said that the government has no plan to devalue the rupee in the near future, instead finalising new strategy to give a boost to exports.
Apparently it is very encouraging to know that the government has taken cautionary measures to bring the trade deficit down as the Central Bank of Revenue (CBR) has raised customs duty on imports of 67 goods to protect the local industry, as well, analysts said.
INTER-BANK RATES: On Monday, during the first post-budget session, the rupee drifted lower versus the dollar, losing five paisa for buying at 60.65 and 60.67, they said.
On Tuesday, the rupee fell three paisa against the dollar for buying and selling at 60.68 and 60.70, they said. On Wednesday, the rupee posted sharp gains in terms of the US currency, picking up eight paisa for buying and selling at 60.61 and 60.63, they said.
On Thursday, the rupee maintained its surge against the dollar, gaining two paisa for buying and selling at 60.59 and 60.61, respectively. On Friday, the rupee did not fluctuate sharply against the dollar for buying and selling at 60.60 and 60.61, dealers said. On Saturday, the rupee picked up one paisa against the dollar for buying at 60.59 while it was unmoved for selling at 60.61, they said.
INTERNATIONAL SCENARIO: In the first session of the week, the dollar hovered near a two-month high against the euro in the Asian market, holding on to gains made late last week when the benchmark US Treasury yield jumped to its highest level in around a year.
In the second session, the dollar was firm against the euro and the yen as the market focused on the US bond yields, while the New Zealand dollar inched up from lows hit the previous day after the Reserve Bank of New Zealand intervened.
The market was closely watching whether benchmark 10-year US Treasury yields would re-test last week's peak of 5.25 percent to determine how much further the US currency could advance, traders said.
In the third session, the dollar struck a 4-1/2-year high against the yen, with traders saying market players were rushing to cover short positions after a drop in Asian stock markets failed to spark an unwind of carry trades.
In the forth session, the dollar climbed against the yen, dealers said. During the fifth session, the dollar held near a 4 1/2-year high at the week-end, boosted by a climb in US Treasury yields to a five-year high this week and as investors found a renewed appetite for risk and continued to sell the low-yielding yen.
The dollar held near a 4 1/2-year high at the week-end, boosted by a climb in US Treasury yields to a five-year high this week and as investors found a renewed appetite for risk and continued to sell the low-yielding yen.
Traders awaited US price data later in the day to see if Treasury yields would rise further, as well as comments by Bank of Japan Governor Toshihiko Fukui after a policy meeting at which the central bank is widely expected to hold rates at 0.5 percent.
The dollar jumped above the psychologically important 122.20 yen level this week as investors abandoned the possibility of a Federal Reserve rate cut this year, prompting a Treasury sell-off that drove the benchmark 10-year yield to its highest since 2002. At the final session, the In the world markets, the dollar briefly slipped at the closing session of the week after a report showed May US core consumer inflation lower than expected, pushing down Treasury yields.
The euro climbed against the dollar, trading at $1.3330 soon after the report from about $1.3320, where it was shortly prior to the data. The dollar was largely unchanged against the yen at about 123.45 yen.
OPEN MARKET RATES: On June 11, the rupee was down against the dollar, falling eight paisa for buying and selling at 60.90 and 60.98, dealers said.
The rupee, however, gained three paisa in terms of the euro for buying and selling at Rs 81.15 and Rs 81.25, they said. On June 12, the rupee did not show any change for buying against the dollar for buying at 60.90 while it shed two paisa for selling at 61.00 fell sharply against the dollar, dropping eight paisa for buying and selling at 60.90 and 60.98, dealers said.
The rupee, however, lost seven paisa against the euro for buying and selling at Rs 81.22 and Rs 81.32, they said.
On June 13, the rupee managed to gain five paisa versus the dollar for buying at 60.85 and was up by eight paisa for selling at 60.92, analysts said. Versus the euro, the lost 42 paisa for buying and selling at 80.80 and 80.90, they said.
On June 14, the rupee lost five paisa against the dollar for buying at 60.90 and slid three paisa for selling at 60.95 in process of trading, they said.
The rupee followed the same and shed 13 paisa in relation to the euro for buying and selling at Rs 80.93 and Rs 81.03, they said.
On June 15, the rupee fell against the dollar for buying and selling at 61.00 and 61.05, they said.
The rupee also shed six paisa versus the euro for buying and selling at Rs 80.98 and Rs 81.08 in process of trading, they said. On Saturday, the rupee depicted mixed trend as it was unchanged on the buying side at 61.00 while it shed five paisa further on the selling counter at 61.10, dealers said.
The rupee slipped against the euro as the single European currency rode over the dollar's weakness in the overseas markets, gaining 47 paisa for buying and selling at Rs 81.45 and Rs 81.55, dealers said.
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