Year-end payments pushed the rupee lower against dollar during the week ended on June 19, 2011, although it struggled to minimise its losses in the face of higher demand by importers to clear the bills for oil and other foreign goods. In the interbank, the rupee shed 11 paisa in relation to dollar for buying and selling at 85.85 and 85.88.
In the open market, the rupee lost 45 paisa against dollar for buying at 86.20 and 35 paisa for selling at 86.30. In terms of euro, the rupee slipped 26 paisa for buying and selling at Rs 123.02 and Rs 123.52.
In fact, the rupee was under pressure as a result of strong demand for the dollars due to traditional forward buying of dollars for pilgrims of Umra and Hajj. The other chief factor of dollar buying is to clear import bills.
Malik Bostan said that forward buying of dollars and increasing demand by importers to meet the oil payments pushed the rupee down marginally. In the meantime, he said, the rupee would trade in the range of Rs 85-86 in terms of the greenback. Other experts were of the view that if the rupee went down versus dollar, it will touch Rs 87 level in the on-going fiscal year.
According to the State Bank of Pakistan (SBP), foreign exchange reserves went up to 17.52 billion dollars during last week.
INTER-BANK MARKET: On Monday, the rupee gained 10 paisa in relation to US currency for buying at 85.64 and eight paisa for selling at 85.69.
On Tuesday, the rupee shed one paisa in relation to dollar for buying and selling at 85.65 and 85.70.
On Wednesday, the rupee lost 22 paisa for buying versus dollar at 85.87 and 19 paisa for selling at 85.89.
On Thursday, the rupee picked up four paisa in relation to dollar for buying at 85.83 and two paisa for selling at 85.87.
On Friday, the rupee gained two paisa in relation to dollar for buying at 85.81 and one paisa for selling at 85.86.
On Saturday, the rupee shed four paisa against dollar for buying at 85.85 and two paisa for selling at 85.88.
OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, the euro edged up against dollar, bouncing back from an early drop as traders expected a bout of short-covering to give the European single currency only a temporary reprieve.
The euro sliced through stop-loss orders in very early Asian trade that drove it as low as $1.4285, with a break of chart support painting a bleak technical picture.
Indian rupee was at Rs 44.72 versus dollar, Malaysian ginggit at 3.0300 and Chinese yuan was at 6.4859. Interbank buy/sell rates for taka against dollar were 73.85/73.95 (previous 73.90/73.90) and Call Money Rates 11.50-12.00 percent (previous 6.75-12.00 percent.
In the second Asian trade, the euro edged up across the board after a batch of Chinese economic data calmed some investor worries by showing that inflation was not as bad as feared and growth still solid, giving a broad boost to risky assets.
The Australian dollar also gained after Chinese reports showed industrial production and retail sales posting solid growth. Consumer prices accelerated to a 5.5 percent annual rate in May, slightly higher than Reuters consensus forecast and fastest in nearly three years.
The yuan ended up slightly versus dollar after People's Bank of China fixed a higher mid-point, snapping three day's of weakness, with the Chinese currency expected to rise further as inflation accelerated to a 34-month high.
Inter bank buy/sell rates for taka against dollar were 73.82/73.92 (previous 73.85/73.95) and Call Money Rates: 8.00-12.00 percent (previous 6.75-12.00 percent). Indian rupee was available at Rs 44.86 in relation to dollar and Malaysian ringgit was at 3.0340.
In the third Asian trade, the euro came under renewed pressure as markets refocused on the euro zone's debt problems after Moody's threatened large French banks with possible downgrades, while hedge funds bet on further drops in the currency.
The step which prompted a move away from riskier assets, helping gold extend gains on Wednesday came after euro zone ministers on Tuesday failed to agree on how private holders of Greek debt should share the cost of a new bailout.
The yuan closed largely steady versus dollar after People's Bank of China set a slightly stronger mid-point as dollar stayed weak, and traders said the Chinese currency was expected to continue its recent rise in the near future as China fights high inflation. Indian rupee was trading at Rs 44.74 versus dollar and Malaysian ringgit was at 3.0275.
In the fourth Asian trade, the euro tumbled to a three-week low, with a break through key support pointing to the risk of further losses, as worries grew that Greece's debt crisis may be spiralling out of control as a new bailout scheme to keep the country from defaulting remained elusive, while protests against austerity turned violent in Athens.
The yuan ended at a record high versus dollar spurred by strong dollar sales in the late session after the foreign exchange regulator said that China would make yuan more flexible, and warned of capital inflows. Spot yuan ended at a record high of 6.4744 per dollar, against 6.4822 at Wednesday's close. Indian rupee was at Rs 44.77 versus dollar and Malaysian ringgit trading at 3.0420.
Inter bank buy/sell rates for taka against dollar were 73.89/73.99 (previous 73.85/73.95) and Call Money Rates 12.00 percent (previous 8.50-12.00 percent).
In the final Asian trade, the euro fell, inching closer to a three-week low versus dollar on worries on how policy makers will tackle Greece's debt crisis, with no apparent solution in sight.
Investor risk appetite also waned as share prices across Asia slumped and after weak US regional manufacturing data cemented concerns about a soft patch in the US economy.
"For investor risk appetite to come back, we'll need a recovery in US economic data and the prospect of an end to Greece's debt crisis. None of which is there at the moment," said Koji Fukaya, chief FX strategist at Credit Suisse.
The single currency fell 0.4 percent to $1.4137 in Asia, edging closer to an overnight trough of $1.4073, its lowest in three weeks. China's yuan closed flat against dollar on Friday, meaning that it has now gained more than 5.4 percent in the year since it was unshackled from a de facto dollar peg, a quicker gain than analysts had expected at the time. In relation to the greenback the Chinese yuan was at 6.466. Indian rupee was trading at Rs 44.90 versus dollar and Malaysian ringgit was at 3.0450.
At the week-end, the euro rose for the second straight day against US dollar and could extend this week on hopes that Greece would get a new aid package needed to avoid a default that could roil global markets.
The leaders of Germany and France said on Friday they were united on a rescue deal for Greece that would include voluntary private sector participation. The euro has been hampered in recent weeks by discord between euro zone paymaster Germany and the European Central Bank, backed by France.
OPEN MARKET RATES: On June 13, the rupee shed 15 paisa in terms of dollar for buying and selling at 85.90 and 86.10. The rupee also dropped 23 paisa versus euro for buying and selling at Rs 122.99 and Rs 123.49.
On June 14, the rupee maintained its overnight levels in terms of dollar for buying and selling at 85.90 and 86.10, while versus the euro, it dropped 77 paisa for buying and selling at Rs 123.76 and Rs 124.26.
On June 15, the rupee lost 10 paisa versus dollar for buying and selling at 86.00 and 86.20. However, the rupee gained by 92 paisa in relation to euro for buying and selling at Rs 122.84 and Rs 123.34.
On June 16, the rupee shed 10 paisa versus dollar for buying at 86.10 and it did not move any side for selling at 86.20. The rupee gained Rs 1.65 in relation to euro for buying and selling at Rs 121.19 and Rs 121.69.
On June 17, the rupee retained overnight level versus dollar for buying at 86.10 while it shed 10 paisa for selling at 86.30. The rupee lost Rs 1.59 in relation to euro for buying and selling at Rs 122.78 and Rs 123.28.
On June 18, the rupee lost 10 paisa in relation to dollar for buying at 86.20 while it retained its overnight for selling at 86.30. The rupee shed 24 paisa in terms of euro for buying and selling at Rs 123.02 and Rs 123.52.