The rupee recovered some lost ground against dollar on the currency market during the shortened week ended on Friday, December 31, 2010 due to bank closing on January 1, 2011. On the inter-bank market, the rupee appreciated by 19 paisa versus dollar for buying and selling at 85.60 and 85.65.
On the open market, the rupee gained 10 paisa in relation to dollar for buying and selling at 85.50 and 85.70. However, it fell sharply in terms of the euro, losing Rs 2.5 for buying and selling at Rs 113.90 and Rs 114.40.
The rupee improved modestly as dollar supply was matching with demand by importers during the last week of 2010. It looked that the rupee might move both ways versus dollar or it may not maintain its stability, if dollars' buying increased by importers.
Besides, the rupee commenced the New Year 2011 on a happy note as it gained against the dollar. It, however, fell versus euro on the open market on Saturday.
INTER-BANK MARKET RATES: On Monday, the rupee was down by three paisa in relation to dollar for buying at 85.82 and two paisa for selling at 85.86.
On Tuesday, the rupee was lower by three paisa versus dollar for buying at 85.85 and two paisa for selling at 85.88.
On Wednesday, the rupee was up by one paisa versus dollar for buying at 85.84 while it shed same amount for selling at 85.89.
On Thursday, the rupee gained 13 paisa in terms of dollar for buying at 85.71 and 14 paisa for selling at 85.75.
On Friday, the rupee picked 11 paisa in terms of dollar for buying at 85.60 and 10 paisa for selling at 85.65.
On Saturday, rates were not issued due to banks' closing.
OVERSEAS OUTLOOK FOR DOLLAR: In the first session of Asia, the Australian dollar dipped after China's central bank raised rates at the weekend, and some analysts said the chance of more tightening in China could prompt investors to sell the Aussie after the year-end holidays.
The yen also hit a three-week high against dollar, although thin trading conditions were likely to have exaggerated price moves.
While the market had been expecting Beijing to tighten further, the timing was a surprise as there had been doubts whether it would raise rates before the end of the year.
Indian rupee was available at Rs 45.22 versus dollar; Malaysian ringgit was trading at 3.0930 in relation US currency, and Chinese yuan was at 6.6307.
Interbank buy/sell rates for the taka against dollar on Monday were 70.69/70.70 (previous 70.69/70.70). Call Money Rates: 16.00-20.00 percent (previous 8.0-22.50 percent).
In the second Asian trade, the euro rose sharply as bears were forced to abandon their bets while dollar came under broad selling pressure, hitting a three-week low against yen and a seven-week low against Australian dollar. The euro jumped after stop-loss orders were triggered at key chart points around $1.32. It rose to $1.3250, its best level in more than a week, and extending its recovery from last week's three-week low of $1.3055.
Euro bears had been frustrated by the currency's firm support for more than a week at its 200-day moving average just below $1.31 and were giving up their positions for now.
Interbank buy/sell rates for taka against dollar on Monday: 70.69/70.70 (previous 70.69/70.70); Call Money Rates 16.00-20.00 percent (previous 8.0-22.50 percent).
The yuan rose against dollar on Tuesday after the People's Bank of China set its midpoint near a record high, a signal that the government's drive to contain inflation may have triggered a new leg of appreciation.
The yuan was only a whisker away from its highest level since its landmark revaluation in July 2005 and was likely to breach that level this week after the PBOC surprised the market by raising official interest rates on Christmas Day in a sign of Beijing's determination to nip high inflation in the bud.
Offshore yuan forwards, the main means by which foreign investors bet on the Chinese currency, may in the coming days increasingly reflect greater appreciation over the current year. The yuan was trading at 6.6236 against the dollar. The Indian rupee rose, buoyed by broad losses in dollar versus major currencies, but demand for dollar from oil firms scrambling to meet month-end import commitments quickly pulled it off its highs. The rupee was trading at Rs 45.13 versus the dollar and Malaysian ringgit was trading at 3.0905 in terms of the greenback.
In the third Asian trade, the dollar stabilised on Wednesday after a spike in US Treasury yields helped it recover from a sharp loss against euro in a yo-yo session the previous day, marked by thin year-end flows. The Swiss franc held near a record high against euro and dollar as investors sought refuge from euro zone debt, while the dollar threatened to break below a familiar range against the yen, another currency that tends to gain from risk-aversion.interbank forex, interest rates. Interbank buy/sell rates for the taka against dollar on Wednesday. 70.74/70.75 (previous 70.72/70.72); Call Money Rates: 14.00-20.00 percent (previous 5.50-22.50 percent).
The yuan closed up slightly against dollar and appeared to be set for a new leg of measured appreciation after the People's Bank of China fixed its mid-point near a record high for the second day.
The PBOC set the day's mid-point against dollar, from which the yuan can rise, or fall, 0.5 percent in a given day, at 6.6247, up slightly from Tuesday's 6.6252 and just shy of a record high of 6.6239 on Nov 12.
In the fourth Asian trade, the dollar weakened broadly, hitting a seven-week low against yen and a 28-year low against Australian currency as traders took falls in US bond yields as a cue to sell it.
US Treasury prices recovered on Wednesday, pushing yields sharply lower, after a $29 billion auction of seven-year notes drew surprisingly strong demand a day after a weak five-year sale.
"Some market players may be building up positions for the next year. As the Federal Reserve is expected to keep printing dollars, the dollar looks set to cheapen next year," said Tsutomu Soma, manager of foreign securities at Okasan Securities.
The yuan hit a record high against dollar after the People's Bank of China set a higher mid-point, sparking expectations of more appreciation in the first quarter of 2011.
Spot yuan hit an intra-day high of 6.6000, the highest level since its revaluation and accompanying forex reforms in July 2005. That was up 0.3 percent from Wednesday's close, the biggest daily percent rise in around seven weeks.
The yuan had so far risen 1.2 percent from a low hit on December 20, marking one of its fastest series of gains since the currency was de-pegged from the dollar in mid-June. It had gained 3.4 percent since the depegging. Indian rupee was available at Rs 44.91 versus dollar and Malaysian ringgit was trading at 3.0810 in terms of the US currency.
In the final session on Friday, the Swiss franc touched a record high against dollar and was within reach of a record peak against euro, though trade was thin on the last trading day of the year. Many Asian centres, including Japan, were closed and traders expected little market action over the course of the day, apart from some end-of-month and end-of-year corporate orders.
China's yuan ended 2010 on a strong note, pushing past 6.59 per dollar on Friday to close the year up 3.6 percent and fanning hopes that it will see even more gains next year.
The currency closed at 6.5897 per dollar, capping nine trading days that saw it rise 1.3 percent from a recent low and giving a decisive close to the year after the currency zig-zagged from mid-October to mid-December.
At the week-end, dollar ended a volatile year on a bit firmer than where it began with investors gearing up for gains in early 2011 on expectations the US economic recovery was gaining momentum.
The euro, which had its worst year against dollar since 2005, was likely to stay under pressure as the market focused on Portugal, Spain and other euro zone countries struggling to address debt and banking problems.
The United States was to release December employment data next Friday. Economists polled by Reuters expected to see a private sector jobs gain of 140,000 and a decline in the jobless rate to 9.7 percent.
Expectations of above-forecast jobs growth grew after the week's data showed four-week average of new jobless claims--a measure of underlying labour market trends--fell to its lowest level since July 2008.
"The numbers coming out of the United States over the last two months have been on the stronger side and that is probably going to continue next week," said Paresh Upadhyaya, head of Americas G10 FX Strategy at BofA Merrill Lynch Global Research in New York.
"That will continue to put upward pressure on yields and therefore the dollar will remain on t he stronger side" against the euro, yen and sterling, he said.
OPEN MARKET RATES: On December 27, the rupee lost 10 paisa versus for buying and selling at 85.70 and 85.90. The rupee fell 40 paisa versus euro for buying and selling at Rs 112.35 and Rs 112.85.
On December 28, the rupee did not show any change versus dollar for buying at 85.70 while it inched up five paisa for selling at 85.85. The rupee fell 75 paisa in relation to euro for buying and selling at Rs 113.10 and Rs 113.60.
On December 29, the rupee did not show any change versus dollar for buying and selling at 85.70 and 85.85. The rupee, however, gained sharply in relation to the euro, rising Rs 1.20 for buying and selling at Rs 111.90 and Rs 112.40.
On December 30, the rupee did not show any change versus the dollar for buying at 85.70 while it inched up with a rise of five paisa for selling at 85.80. The rupee, however, lost Re l versus euro for buying and selling at Rs 112.90 and Rs 113.40.
On December 31, the exchange rates were not issued by the Forex Association due to strike in the city. On January 1, the rupee gained 20 paisa against dollar for buying at 85.50 and 10 paisa for selling at 85.70. The rupee, however, depreciated versus the euro, losing Re 1 for buying and selling at Rs 113.90 and Rs 114.40.