The rupee posted fresh gains against the dollar and euro on the currency market during the week, ended on March 26, 2011. On the interbank market, was higher by 9-paisa in terms of the US currency for buying at Rs85.35 and it also picked up 6-paisa for selling at Rs85.40.
On the open market, the rupee recovered 25-paisa versus the dollar for buying and selling at Rs85.15 and Rs85.30. It also followed the same trend, rising by 95-paisa in relation to the euro for buying and selling at Rs 119.45 and Rs 119.95.
The rupee retained its firmness against the dollar despite the increase in the US currency. Dollars' demand was strong due to forward purchasing by importers. Last week, the State Bank of Pakistan (SBP), has lifted a three-year ban on the forward cover facility for the importers.
The central banks said that it has waved the restrictions over the forward buying of dollars due to persistent stability in the country's foreign exchange reserves.
Just after lifting of ban, the reserves came down from 17.61 billion dollars to 17.50 billion dollars.
In a surprising way, the dollar is shedding its gains, instead of gaining ground versus the rupee. In the meantime, market players were expecting, the rupee may not maintain its firmness versus the dollar in the coming days.
INTER-BANK MARKET RATES: On Monday, the rupee extended its fall, losing 6-paisa against the dollar for buying at Rs85.50 and it also shed 9-paisa for selling at Rs85.55.
On Tuesday, the rupee posted fresh gain of 12-paisa in relation to the dollar for buying and selling at Rs85.38 and Rs85.43. On Wednesday, the market was closed due to 23rd March holiday. On Thursday, the rupee picked up 13-paisa versus the dollar for buying and selling at Rs85.25 and Rs85.30. On Friday, the rupee posted fresh gain of 10-paisa in relation to the dollar for buying and selling at Rs85.15 and Rs85.20.
On Saturday, the rupee lost 20-paisa versus the US currency for buying and selling at Rs85.35 and Rs85.40 in process of trading.
OVERSEAS OUTLOOK FOR DOLLAR VS MAJOR CURRENCIES: In the first Asian trade, the yen stayed on the defensive on Monday, but losses were limited, in a sign that further action may be needed to curb the Japanese currency after the first G7 joint intervention in over a decade.
Analysts said the G7 deal was more likely an attempt to dampen market volatility than reverse the yen's strengthening trend. Japan markets are off on Monday, sapping liquidity even further.
Indian rupee was at Rs 45.12 in terms of the greenback, Malaysian ringgit was available at 3.0370 in relation to the US currency and Chinese yuan was trading at 6.5648 versus the dollar.
Interbank buy/sell rates for the taka against the dollar on Monday. 72.30/72.48 (previous 71.99/72.40)
Call Money Rates: 11.00-12.00 percent (previous 11.00-12.00 percent).
In the second Asian trade, the yen edged higher, and some traders say a massive build-up of offers to sell dollars may test whether Japanese authorities have a line in the sand at 80 for the USD/JPY to launch intervention.
The dollar looked vulnerable on charts following its recent drop below trendline support against a basket of currencies. The euro made the most of the dollar's woes, hovering near its highest in more than four months against the greenback.
Traders said various market players were looking to sell the dollar against the yen on rallies, with selling interest particularly strong starting from 82.00 yen - the dollar's high against the yen after Friday's joint intervention.
Indian rupee was available at Rs 45.01 versus the dollar, Malaysian ringgit was trading at 3.0340 in terms of the greenback and Chinese yuan was at 6.558 in relation to the US currency.
Interbank buy/sell rates for the taka against the dollar on Tuesday. 72.40/72.50 (previous 72.30/72.48)
Call Money Rates: 10.00-12.00 percent (previous 7.00-12.00 percent).
In the third Asian trade, the euro slipped, retreating from a 4 1/2-month high against the dollar, as worries about debt problems in Portugal and Ireland sapped appetite for the currency and its near-term outlook is seen hinging on whether Lisbon's make-or-break attempt to garner parliamentary support for its austerity measures will succeed.
Portugal's political crisis has quashed the latest rally in the euro, which climbed to $1.4249 earlier this week, but some analysts said any selling in the euro if the government fails was unlikely to extend far below $1.41, given expectations EU leaders are close to agreeing the details of a debt-rescue fund, while euro zone interest rates are widely seen rising next month.
Lisbon's parliament will vote on the government's latest austerity measures on Wednesday and Prime Minister Jose Socrates has threatened to resign if the opposition fails to approve the measures, setting the stage for a potential collapse of his minority government a day before a European summit where leaders are due to discuss steps to deal with debt problems.
Indian rupee was available at Rs 44.96 versus the dollar, Malaysian ringgit was trading at 3.0300 in relation to the greenback and Chinese yuan was 6.559 in terms of the US currency.
Interbank buy/sell rates for the taka against the dollar on Wednesday. 72.50/72.62 (previous 72.40/72.50)
Call Money Rates: 11.00-12.00 percent (previous 7.00-12.00 percent).
In the fourth Asian trade, the euro slipped, pulling further away from a 4-1/2 month high versus the dollar on heightened worries that political instability in Portugal may force it to become the latest country in the region to seek a European Union bailout.
The single currency slipped to the day's low of $1.4071, as concerns about weakness in debt-heavy euro zone economies were highlighted by a media report that ratings agency Moody's would downgrade the credit ratings of Spanish banks on Thursday.
Market participants said the euro could slide further to $1.40 in the near term. Traders said light stop-loss orders were creeping below that level on Thursday.
Bangladesh Interbank buy/sell rates for the taka against the dollar on Thursday. 72.59/72.65 (previous 72.50/72.62) Call Money Rates: 11.00-12.00 percent (previous 7.00-12.00 percent).
Indian rupee was at Rs 44.85 against the dollar, Malaysian ringgit was available at 3.0285 in terms of the US currency and Chinese yuan was trading at 6.561 versus the dollar.
In the final Asian trade, the dollar hovered near a 15-month low against a basket of currencies and was in sight of a 29-year trough against the Australian dollar, as a bounce in equities suggested that risk appetites were on the mend.
The euro dipped to a session low $1.4150 after Standard & Poor's downgraded Portugal's credit ratings and warned it could cut it again, but it quickly recovered, as further losses were clipped by bids seen around $1.4140.
Indian rupee was at Rs 44.75 in terms of the US currency, Malaysian ringgit was available at 3.0251 in relation to the greenback and Chinese yuan was trading at 6.558 versus the dollar.
At the weekend, the euro slipped against the US dollar and could remain under pressure in the short run on concern about a worsening debt crisis in Portugal following the collapse of the country's government.
While a pullback is likely, traders said the euro should be supported as long as it holds above $1.40. Expectations of a euro-zone interest rate rise next month have helped the single currency's resilience despite worries about heavily indebted Portugal and Spain.
The US dollar climbed against the euro on Friday and is likely to remain buoyant in the week ahead after a Federal Reserve official said the central bank would have to tighten monetary policy soon to avoid sowing the seeds of inflation.
Speaking in New York, Philadelphia Federal Reserve Bank President Charles Plosser said consumer spending continues to expand at a "reasonably robust pace" and the labour market is improving. The overall economy, he said, has gained "significant strength and momentum" since the summer.
OPEN MARKET RATES: On March 21, the rupee managed to hold its weekend levels against the dollar for buying and selling at Rs85.40 and Rs85.55.
While, the rupee shed five-paisa in terms of the euro for buying and selling at Rs 120.45 and Rs 120.95.
On March 22, the rupee retained its overnight levels against the dollar for buying and selling at Rs85.40 and Rs85.55. The rupee continued slide against the euro, losing further 84-paisa at Rs 121.29 and Rs 121.79. The open market was closed due to 23rd March holiday.
On March 24, the rupee gained 10-paisa in relation to the greenback for buying and selling at Rs85.30 and Rs85.45. The rupee also rose by Rs 1.26 versus the euro for buying and selling at Rs 120.03 and Rs 120.53.
On March 25, the rupee extended its overnight appreciation versus the dollar, rising 10-paisa for buying and selling at Rs85.20 and Rs85.35. The rupee, however, fell in relation to the euro, sliding 35-paisa for buying and selling at Rs 120.38 and Rs 120.88.
On March 26, the rupee gained marginally in relation to the dollar for buying and selling at Rs85.15 and Rs85.30. The rupee recovered 93-paisa in terms of the euro for buying and selling at Rs 119.45 and Rs 119.95.