Range-bound trading was seen on money market during the week ended on July 2, 2011, as the rupee fluctuated slightly with marginal gain in terms of dollar, while it drifted sharply lower against euro as the single European currency's performance was excellent after ease in Greek debt crisis.
On the interbank market, the rupee gained five paisa versus dollar for buying at 85.90 and 4 paisa for selling at 85.95.
In the open market deals, the rupee was up by 10 paisa in relation to dollar for buying and selling at 86.00 and 86.20. The rupee, however, lost Rs 2.67 versus euro for buying and selling at Rs 124.40 and Rs 124.90.
As the rupee retained its present level against dollar at the beginning session of fiscal year 2011-12, it was a good factor for the economy, but dollar's availability is vital for the rupee's smooth journey in the coming days.
Healthier trend in the remittances and exports would enable the rupee to stand with its counterpart in the coming days.
INTER-BANK MARKET: On Monday, the rupee shed 14 paisa against dollar for buying at 86.09 and 13 paisa for selling at 86.12.
On Tuesday, the rupee gained 5 paisa in terms of dollar for buying at 86.04 and 4 paisa for selling at 86.08.
On Wednesday, the rupee inched up 3 paisa for buying versus greenback at 86.01 and five paisa for selling at 86.03.
On Thursday, the rupee gained six paisa versus dollar for buying at 85.95 and five paisa for selling at 85.98. On Friday, interbank rates were not issued due to bank closing.
At the weekend on Saturday, the rupee gained five paisa against dollar for buying at 85.90 and three paisa for selling at 85.95.
OVERSEAS OUTLOOK FOR DOLLARS: In the first Asian trade, the euro struggled near a record low against the Swiss franc and fell versus the dollar, staying under pressure ahead of decision by the Greek parliament on whether to back austerity reforms demanded by international lenders.
Greece's deputy prime minister warned on Sunday that rebel lawmakers may block some of the reforms, but added that parliament would probably back an overall austerity package to avert national bankruptcy.
Investors have been selling euro and buying back dollars to minimise risk as the market grows increasingly concerned about the financial system in Europe after shares of two top Italian banks plunged amid concerns about their capital positions.
"The euro is exposed to more selling pressure as the market is starting to factor-in systemic risk to the euro zone," said Daisuke Karakama, market economist at Mizuho Corporate Bank.
The yuan ended down against dollar as People's Bank of China set a slightly weaker mid-point following a rise in dollar index. Inter bank buy/sell rates for taka against dollar were 74.08/74.10 (previous 74.10/74.10), and Call Money Rates: 6.00-12.00 percent (previous 9.00-12.00 percent).
In the second Asian market, the euro inched higher but stalled just below chart resistance as investors awaited to see if Greece's parliament would approve austerity steps critical for international aid that the country needs to avoid a default.
The euro briefly rose to an intra-day high near $1.4330 in early Asian trading, with stop-loss buying near $1.4310 helping add to its gains.
But it later lost steam, stalling short of resistance clustered near the $1.4350 to $1.4360 area, with market players citing talk of euro offers near $1.4320 to $1.43 30.
The euro edged up 0.1 percent from late US trade on Monday to $1.4295, adding to the gains made the previous day, when it enjoyed a short squeeze from a low of $1.4102.
Inter bank buy/sell rates for taka against dollar on Tuesday were 74.10/74.14 (previous 74.08/74.10) and Call Money Rates: 6.00-10.50 percent (previous 6.00-12.00 percent. Indian rupee was available at Rs 45.03 versus dollar, Malaysian ringgit at 3.0425, and Chinese yuan at 6.4741.
In the third Asian trade, the euro struggled to extend gains as investors hesitated to buy it further on the Greek parliament's expected acceptance of an austerity package, while the market was wary about the long-term outlook for the euro zone's debt problems.
Sentiment towards the euro was lifted by comments by European Central Bank President Jean-Claude Trichet, which markets interpreted as signalling a July interest rate hike, also helping shore up the common currency.
Still, investors were careful about taking additional buying positions as the euro shied away from $1.4400 hit the previous day, a level near its 55-day moving average of around $1.4401.
The yuan closed up against dollar on Wednesday after the People's Bank of China set a stronger mid-point amid pressure from the United States for further appreciation in the Chinese currency. Indian rupee was available at Rs 45.04 versus the dollar and Malaysian ringgit was trading at 3.0400 in terms of the greenback.
In the fourth Asian trade, the euro surged to a three-week peak against the dollar, swept higher by a wave of stop-loss buying and extending a rally after Greece moved a step closer to securing international aid.
Dollar-selling by macro hedge funds, a flurry of short-covering in the euro, and traders establishing long euro positions all helped lift the single currency, which extended its gains further after taking out an option barrier at $1.45.
The rise came after Greek lawmakers voted by a clear margin for a five-year austerity plan. The solid margin suggested the government should be able to push through a second package of laws on Thursday, implementing specific budget measures and asset sales.
The yuan ended flat against the dollar on Thursday, locking in a 1.94 percent gain for the first half of the year, a relatively slow pace of appreciation that traders expect to quicken in the second half.
Indian rupee was at Rs 44.86 versus the dollar and Malaysian ringgit was at 3.0210 in terms of the greenback.
Inter bank buy/sell rates for the taka against the dollar on Thursday.74.19/74.24 (previous 74.10/74.19). Call Money Rates: 4.75-9.00 percent (previous 4.75-10.00 percent).
In the final Asian trade, the euro's advance against the dollar lost momentum on Friday after a rally this week as the market focus shifted to upcoming economic data, with Greece looking set to secure emergency funds and avert imminent default.
The single currency, however, was supported by buying from Asian central banks after early rounds of profit-taking had pushed it down to an Asian session low of $1.4467, Tokyo bank dealers said.
Investors broadly covered short positions in the dollar and locked in profits on outperforming commodity currencies such as the Australian and New Zealand dollars after China's purchasing managers' index came in slightly below expectations at 50.9.
The euro was also well-supported against the yen and the Aussie with traders saying the market was starting to rebuild longs ahead of Thursday's European Central Bank monetary policy meeting.
Investors will focus on a news conference by ECB President Jean-Claude Trichet following the meeting, during which it is expected to raise interest rates again, data earlier in the week showing inflation in June having stabilised well above the bank's target. Indian rupee was trading at Rs 44.70 versus dollar, Malaysian ringgit was available at 3.0130 and Chinese yuan was at 6.4650 against greenback.
At the week-end, which was a banner week for euro, Greece evaded a near term default and investors embraced risk, but did not expect a repeat performance given investors' belief that the country's debt crisis is far from over and concerns about the global economic recovery.
Relief over Greece caused the euro to enjoy its best weekly performance against the US dollar since January.
After days of Greece headlines, market participants next week will turn their focus on US economic data and a European Central Bank monetary policy meeting.
The Greek parliament passed two crucial austerity bills this week, opening the way for international lenders to release a 12-billion-euro ($17 billion) loan instalment that Athens urgently needs to stave off bankruptcy.
IN THE OPEN MARKET DEALS: On June 27, the rupee fell by 5 paisa against the greenback for buying and selling at 86.15 and 86.35. The rupee followed the same pattern in terms of the euro, losing 97 paisa for buying and selling at Rs 122.70 and Rs 123.20.
On June 28, the rupee retained the overnight level against the greenback for buying and selling at 86.15 and 86.35. The rupee managed to gain one paisa versus the euro for buying and selling at Rs 122.69 and Rs 123.19. On June 29 the rupee gave up weakness against the greenback, gaining 10 paisa for buying and selling at 86.05 and 86.25. The rupee, however, fell by Re.one versus the euro for buying and selling at Rs 123.69 and Rs 124.19. On Thursday, the rupee followed the same print against the greenback and it gained 15 paisa for buying and selling at 85.90 and 86.10. The rupee, however, drifted lower in relation to the euro, shedding 33 paisa for buying at Rs 124.04 and it lost 35 paisa for selling at Rs 124.54. On Friday, the rupee shed 10 paisa against the greenback for buying at 86.00 while it retained the overnight level at 86.10 for selling in process of trading. The rupee also lost 40 paisa versus the euro for buying and selling at Rs 124.44 and Rs 124.94. On Saturday, the rupee maintained overnight level against the greenback for buying at 86.00 while it shed 10 paisa for selling at 86.20 for selling. The rupee, however, inched up with a rise of 4 paisa versus the euro for buying and selling at Rs 124.40 and Rs 124.90.
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