THE RUPEE: Mixed trend

Divergent trend was witnessed on the money market as the rupee performed on the both sides versus the dollar during the week, ended on 04 Jan, 2020.

INTER-BANK MARKET RATES: The rupee gained slightly versus the dollar for buying and selling at Rs 154.89 and Rs 154.91.

OPEN MARKET RATES: The rupee dropped marginally in term of the dollar for buying and selling at Rs 154.90 and Rs 155.20. The rupee lost 40 paisas in relation to the euro for buying and selling at Rs 171.70 and R173.20.

The rupee during the 2019, suffered hard versus all major currencies, but at the beginning session of the year, the rupee managed to hold present levels in terms of the dollar, marketmen observed. In the meantime, the rupee fell sharply in relation to pound sterling, they noted.

According to reports, country's foreign exchange reserves increase $582 million to $11,489.4 million in the week ending Dec 27, compared to $10,907.3 million in the previous week.

INTER-BANK MARKET RATES: On Monday, the rupee could not maintain firmness versus the dollar, shedding four paisas levels for buying and selling at Rs 154.93 and Rs 154.95. On Tuesday, the rupee picked up eight paisas against the dollar for buying and selling at Rs 154.85 and Rs 154.88. On Wednesday, the rates of the rupee were not available because of bank closing. On Thursday, the rupee depicted slight fall against the dollar for buying and selling at Rs 154.90 and Rs 154.95. On Friday, the rupee gained marginally versus the dollar for buying and selling at Rs 154.89 and Rs 154.91.

OPEN MARKET RATES: On Dec 30, the rupee held the overnight levels in relation to the dollar for buying and selling at Rs 154.70 and Rs 155.00, they said. The rupee fell in terms of the euro for buying and selling at Rs 172.20 and Rs 173.80, they said.

On Dec 31, the rupee dropped modestly in relation to the dollar for buying and selling at Rs 154.70 and Rs 155.00, they said. The rupee also shed 30 paisas in terms of the euro for buying and selling at Rs 171.36 and Rs 173.10.

On Jan 1, the rupee did not move any side against the dollar for buying and selling at Rs 154.70 and Rs 155.00. The rupee, however, gained modestly in terms of the euro for buying and selling at Rs 171.70 and Rs 173.70.

On Jan 2, the rupee was unchanged versus the dollar for buying at Rs 154.70 while it shed 10 paisas for selling at Rs 155.10, they said. The rupee, however, lost 50 paisas in terms of the euro for buying at Rs 172.20 while it did not show any change for selling at Rs 173.70, they said.

On Jan 3, the rupee moved slightly in term of the dollar for buying and selling at Rs 154.80 and Rs 155.10 respectively, they said. The rupee was available in relation to the euro for buying and selling at Rs 171.30 and R172.80.

On Jan 4, the rupee shed 10 paisas in term of the dollar for buying and selling at Rs 154.90 and Rs 155.20. The rupee lost 40 paisas in relation to the euro for buying and selling at Rs 171.70 and R173.20.

WORLD VALUE OF DOLLAR: In the first Asian trade, the dollar was on the defensive on Monday in light year-end trading after suffering a setback in the previous session, as safe-haven demand for the greenback waned on hopes of a US-China trade deal and renewed optimism about global growth.

Sentiment was also boosted during Asian hours after China's central bank unveiled a measure that would help lower borrowing costs and boost flagging economic growth. Investors also cheered a report forecasting China's 2019 retail sales grew by 8%.

As the dollar fell out of favour, its index against six major currencies eased a shade to 96.810 following Friday's 0.6% which was its biggest single day percentage drop since June. With Friday's loss, the index's gains for the year have shrunk to 0.7%, putting it on track for the smallest annual change in six years.

Against the Japanese yen, the dollar was a tad weaker at 109.13, on track to end the year slightly below where it started in January. The big gainers in recent weeks have been the risk-sensitive and commodity-linked currencies of Australia and New Zealand.

The dollar was trading against the Indian rupee at Rs 71.343, the greenback was at 4.112 versus the Malaysian ringgit and the US currency was available at 6.983 in terms of the Chinese yuan.

In the second Asian trade, the dollar dipped to a near three-week low against the yen in thin year-end volume on Tuesday as investors favoured riskier assets, led by renewed optimism about global growth.

The greenback was off 0.2% at 108.64 against the Japanese yen, the weakest since Dec. 12 and on track for its third straight session of losses.

The dollar index, which measures the currency against a basket of rivals, was a shade weaker at 96.695.

On Friday, the index had suffered its biggest one-day fall since March, which left its gains for the year at about 0.5%, compared with returns of 4.4% in 2018. It is now on track for the smallest rise since 2013.

Encouraging news on the Sino-US trade deal boosted risk sentiment in currency markets overnight.

The dollar was trading against the Indian rupee at Rs 71.280, the greenback was at 4.092 in terms of the Malaysian ringgit and the US currency was at 6.978 versus the Chinese yuan.

In the New York trade, the dollar slid to a six-month low on Tuesday as progress on US-China trade tensions led investors to higher-risk assets, while a year-end rally that pushed global equity markets to record highs petered out on the last trading day of 2019.

The year was remarkable for investors, as many equity indices, long-term bonds, oil and gold posted double-digit gains.

US President Donald Trump said the Phase 1 trade pact with China would be signed on Jan. 15 at the White House, though confusion remains about details of the agreement.

In the fourth Asian trade, the dollar started the New Year where it left the old one, on the back foot as investors wagered US economic out performance might be drawing to a close as optimism on trade brightens the outlook for growth globally.

Signs of progress in the Sino-US trade dispute undermined the dollar for much of December, leaving its index down 1.9% on the month. It was up just a fraction on Thursday at 96.546 having touched a six-month trough ahead of the holidays.

The euro held at $1.1215, after gaining 1.8% in December to reach its highest since early August. It now looks set to challenge the August peak at $1.1249.

The dollar eased further on the Chinese yuan after shedding 1% last month to stand at 6.9630. It was also finely poised on the yen at 108.68, just a whisker from the December lows and major support around 108.40.

The dollar was trading against the Indian rupee at Rs 71.333, the US currency was available versus the Malaysian ringgit at 4.085 and the greenback was at 6.964 in terms of the Chinese yuan.

In the final Asian trade, the Japanese yen led other safe-haven assets higher on Friday after US air strikes on Baghdad airport killed a senior Iranian military official, stoking tensions in the Middle East and lifting the price of oil.

US Treasury bonds and gold rallied after an Iraqi militia spokesman told Reuters that Iranian Major-General Qasem Soleimani and Iraqi militia commander Abu Mahdi al-Muhandis were killed in the attack.

The Pentagon confirmed the attack, saying Soleimani was actively developing plans to attack Americans in Iraq and the Middle East.

The dollar was trading against the Indian rupee at Rs 71.665, the US currency was available versus the Malaysian ringgit at 4.098 and the greenback was at 6.971 in terms of the Chinese yuan.

In the final US trade, investors rushed into safe-haven assets on Friday after US air strikes in Iraq killed a senior Iranian military official, sending the Japanese yen to a three-month high, while the US dollar index was knocked by the weakest domestic factory activity in a decade.

In addition to the yen, US Treasuries, German bunds and gold rallied after the overnight air strike in Baghdad killed Qasem Soleimani, Tehran's most prominent military commander and the architect of its growing military influence in the Middle East.

The US dollar index initially benefited from the move into safe-haven assets, but those gains were erased after the Institute for Supply Management (ISM) reported that the manufacturing sector contracted significantly in December. It was last up 0.03% on the day at 96.873.