Divergent trend was seen on the money market during the week ended on January 29, 2011 as the rupee moved both ways versus dollar. On the interbank, the rupee gained 24 paisa against dollar for buying at 85.65 and 22 paisa for selling at 85.70.
On the open market, the rupee shed five paisa in relation to dollar for buying at 86.05 and was unchanged for selling at 86.20. The rupee, lost Rs 1.25 in terms of the euro for buying and selling at Rs 116.80 and Rs 117.30.
The rupee's present trend versus dollar is mixed, but it is likely that if the demand for dollars by importers increases, it may not retain its level in the coming days. On the other hand, rising trend in remittances may help the rupee to trim its losses versus dollar.
Positive trend in the country's foreign exchange reserves, which hit highest level at 17.3 billion dollars, may also help the rupee to maintain its firmness versus dollar.
The State Bank of Pakistan Governor Shahid Kardar said on Saturday that the SBP has decided to leave its key policy rate unchanged at 14 percent for subsequent two months.
INTER-BANK MARKET RATES: On Monday, the rupee was down by 10 paisa against dollar for buying at 85.99 and 12 paisa for selling at 86.04.
On Tuesday, the rupee gained nine paisa against dollar for buying at 85.90 and 11 paisa for selling at 85.93.
On Wednesday, the rupee picked up six paisa versus dollar for buying at 85.84 and five paisa for selling at 85.88.
On Thursday, the rupee picked up four paisa versus dollar for buying at 85.80 and three paisa for selling at 85.85.
On Friday, the rupee gained 10 paisa against dollar for buying at 85.70 and 12 paisa for selling at 85.73.
On Saturday, the rupee was higher by five paisa against dollar for buying at 85.65 and three paisa for selling at 85.70.
OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, the euro backed off a nine-week high with sharp gains of the past two weeks on easing worries about eurozone debt inducing profit-taking. The euro held above key resistance around $1.3570 that it broke on Friday, a 50 percent retracement of its decline from November to early this month, as data showed speculators have closed all their bets against the currency.
China's yuan ended at a record high versus dollar after it traded above the central bank's mid-point, and traders said the currency appeared poised for slow but steady appreciation this year.
Interbank buy/sell rates for the taka against dollar: 71.15-71.15 (previous 71.13/71.15); Call Money Rates: 4.00-6.00 percent (previous 4.50-6.50 percent). Indian rupee edged higher, tracking euro's sharp gains in the previous session, but a choppy domestic share market clouded the outlook for foreign fund flows and limited the gains. At 10:20 am (0450 GMT), the rupee was at 45.57/58 per dollar, slightly stronger than 45.615/625 at close on Friday when it had dropped during trade to 45.77, its weakest since December 1.
In the second Asia trade, the euro held firm near a two-month peak, showing only the barest signs of fatigue after a rally in the past two weeks, as climbing eurozone interest rates prompted speculators to bet on further gains in the currency.
The Australian dollar fell broadly after lower-than-expected consumer inflation data reinforced market expectations that Australia's central bank will be in no hurry to lift interest rates, though it cut much of its losses in late Asian trade.
The single currency last traded at $1.3650, having risen as high as $1.3685, just one pip off a two-month peak marked in New York on Monday.
The move brought into play the next major resistance level at $1.3742, a 61.8 percent retracement of the November-January fall, and then the euro's November 22 high of $1.3786.
China's yuan steadied versus dollar, hovering near its record trading high, after the People's Bank of China set the mid-point at a new peak but up only slightly from Monday's fixing, traders said.
Indian rupee strengthened, supported by the euro's gains against the dollar and firmer local stocks. At 10:30 am (0500 GMT), the rupee was at 45.48/49 per dollar, 0.4 percent above its close of 45.67/68 of Monday.
In the third Asian trade, the dollar held near a 10-week low against a basket of currencies, with the market looking for confirmation from the Federal Reserve later in the day that its focus would remain on supporting growth.
The perception that the Fed would keep a much easier policy than the European Central Bank, which is growing worried about inflation, helped euro to extend its recovery after a two-month drubbing from worries over eurozone debt.
The dollar extended losses for a fourth day, after US bond yields fell on news of President Barack Obama's proposal to freeze portions of federal spending in his State of Union address.
Interbank buy/sell rates for taka against dollar: 71.15/71.15 (previous 71.15/71.15); Call Money Rates: 4.25-5.75 percent (previous 4.00-7.00 percent).
China's yuan ended up near its record trading high versus dollar after the People's Bank of China set the mid-point at a new peak again but up only slightly from Tuesday's fixing, traders said.
In the fourth Asian trade on Friday, the euro clung near a two-month high after the Federal Reserve showed it was in no rush to scale back its easy policy, leaving the European Central Bank's stance looking comparatively hawkish.
The contrast between the Fed's emphasis on efforts to cure high unemployment and the ECB's growing concern about inflation could keep the euro in an uptrend from a four-month low hit earlier in the month. Still, the currency's two-week-long rally faced a growing risk of over stretching in the near term with resistance seen looming around $1.3740-3786, analysts said.
Indian rupee was at 45.71 in term of US currency; Malaysian ringgit at 3.0510,and Chinese yuan was available at 6.583.
During the final Asian session of the week, yen recouped some of the losses it made after Standard & Poor's cut Japan's credit rating by a notch, while euro slipped from two-month highs as players took profits from its recent rally.
The euro's hefty gains from a four-month low, hit less than three weeks ago, suggested that it was ripe for profit-taking, but a mounting number of warnings on inflation by eurozone policy-makers was seen supporting the currency.
The dollar slipped to 82.70 yen from around 82.90 yen in late US trade, after initially rallying to as high as 83.22 yen on Thursday.
Indian rupee was trading at Rs 45.57 versus dollar, Malaysian ringgit at 3.0550 and Chinese yuan at 6.5851.
At the week-end, the US dollar and Swiss franc rallied, with more gains seen likely, as tensions in Egypt raised concerns about stability in the Middle East and Africa, increasing investors demand for safer havens and prompting them to sell riskier assets.
Emerging market currencies' sold-off led by the Turkish lira and the Israeli shekel as news reports showed dozens of people were wounded after police and demonstrators fought in the streets of Cairo in protests against President Hosni Mubarak's three-decade rule.
OPEN MARKET RATES: On January 24, the rupee shed 10 pisa against dollar for buying and selling at 86.10 and 86.30. The rupee lost 60 paisa in relation to euro for buying and selling at Rs 116.15 and Rs 116.65.
On January 25, the rupee shed five paisa against dollar for buying at 86.15 while it managed to hold it overnight level for selling at 86.30. The rupee lost 70 paisa against euro for buying and selling at Rs 116.85 and Rs 117.35.
On January 26, the rupee gained 25 paisa against dollar for buying at 85.90 and 15 paisa for selling at 86.15. The rupee, however, extended its fall against euro, sliding 65 paisa for buying and selling at Rs 117.50 and Rs 118.00.
On January 27, the rupee shed 25 paisa for buying against dollar at 86.15 and 15 paisa for selling at 86.30. The rupee, however, gained 40 paisa versus euro for buying and selling at Rs 117.10 and Rs 117.60.
On January 28, the rupee was up by five paisa in relation to dollar for buying at 86.10 while it retained its overnight level for selling at 86.30. The rupee, however, slid 40 paisa for buying and selling versus euro at Rs 117.50 and Rs 118.00.
On January 29, the rupee gained five paisa against dollar for buying at 86.05 and 10 paisa for selling at 86.20. The rupee gained 70 paisa against euro for buying and selling at Rs 116.80 and Rs 117.30.