The dollar may go up against the rupee due to forward buying by the importers, as the national currency fell sharply during the week, ended on December 3, 2011.
INTER-BANK DEALINGS: The rupee lost 1.20 in relation to the dollar for buying and selling at Rs 88.95 and Rs 89.00.
OPEN MARKET RATES: The rupee also dropped steeply versus the dollar, shedding 1.50 for buying at Rs 89.30 and it also shed Rs 1.55 for selling at Rs 89.60. Not only dollar showed its muscles in terms of the rupee, the euro also managed to gain sharply by Rs 2.94 for buying and selling at Rs 118.97 and Rs 119.47.
It was forward booking for the dollars, which pushed the rupee down and there are indications that the rupee is likely to lose further ground in the coming days.
Last week, the Governor of the State Bank of Pakistan (SBP) Yaseen Anwar that the current rupee-dollar parity is market driven and has nothing to do with speculations. The international oil prices are unprecedented, which led to change in rupee-dollar parity, he added. "It all depends on demand and supply and has nothing to do with speculative trading," SBP Governor said.
The SBP kept the key policy rate unchanged at 12 percent for the next two months. The SBP had cut the rate by 150 basis points to 12 percent on October 8 to promote economic growth.
Higher oil prices in the international market are dragging them (importers) in the panic buying and dollar itself is rising versus the major currencies.
As a number of developed countries do not have great purchasing power due to economic downturn, therefore, India, Bangladesh and Sri Lanka depreciated their currencies to boost exports in the competitive market.
As a result of strong dollar buying, country's foreign exchange reserves fell to 16.88 billion dollars in the week ending November 25. The reserves hit a record 18.31 billion dollars in the week ended July 30, the central said.
INTER-BANK MARKET RATES: On Monday, the rupee dropped by 25-paisa versus the greenback for buying and selling at Rs 88.00 and Rs 88.05. On Tuesday, the rupee shed 23-paisa in relation to the dollar for buying at 88.23 and it also shed 22-paisa for selling at 88.27.
On Wednesday, the rupee lost 47-paisa in relation to the dollar for buying at Rs 88.70 and it also shed 48-paisa for selling at Rs 88.75, they said. At a time, the rupee was trading at Rs 88.80 during the day. On Thursday, the rupee resisted sharp fall versus the rupee, losing 5-paisa for buying and selling at Rs 88.75 and Rs 88.80.
On Friday, the rupee shed 20-paisa versus the dollar for buying and selling at Rs 88.95 and Rs 89.00, they said.
OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, the euro surged on short covering after an Italian newspaper said the International Monetary Fund (IMF) was preparing an aid package for Italy, but doubts about the feasibility of the reported plan kept the outlook uncertain, Reuters said.
The euro rose 0.6 percent to $1.3331 after the un-sourced report in Italian daily La Stampa said up to 600 billion euros could be made available at a rate of between 4-5 percent to give Italy breathing space for 18 months, it reported
The report helped soothe market nerves, as Italy plans to raise up to 8 billion euros in the bond market on Tuesday. But market players remained sceptical about the IMF aid, as such a sum would be beyond its current capacity.
The dollar was trading against the Indian rupee at Rs 52.10, versus the Malaysian ringgit it was 3.1950 and greenback was at 6.3788 in terms of the Chinese yuan. Inter bank buy/sell rates for the taka against the dollar on Monday. 76.76-76.84 (previous 76.72-76.76) Call Money Rates: 06.50/08.00 percent (previous 06.50-08.00 percent).
In the second Asian trade, the euro edged up against the dollar, consolidating the gains made the previous day on hopes that European officials will finally make some progress in tackling their debt crisis this week.
But ever conscious that policymakers can easily disappoint yet again, markets will be hard pressed to keep pushing the common currency higher in the absence of concrete action, traders said.
There was little reaction in Asia to news Fitch had cut the credit outlook for the United States to negative, though it expected no move on the actual rating until late 2013.
The euro also showed limited reaction to a report on French newspaper La Tribune's website saying Standard & Poor's could change the outlook for France's triple-A rating to negative within the next 10 days. Inter bank buy/sell rates for the taka against the dollar on Tuesday 76.82-76.90 (previous 76.76-76.84). Call Money Rates: 07.00/08.00 percent (previous 06.50-08.00 percent.
The dollar was trading against the Indian rupee at Rs 51.93, Versus the Malaysian ringgit, the greenback was at 3.1780 and against the Chinese yuan it was at 6.3790 per unit.
In the third Asian trade, the euro held steady, as the market gave a guarded reception to details on the euro zone's new lending facility and on proposals to expand funding for the IMF so it could lend to troubled members such as Italy.
Euro zone finance ministers agreed to use the EFSF fund, as a sort of bond insurance vehicle that would provide partial protection of 20-30 percent against losses on the principal of new bonds issued by a requesting member.
The euro was little changed at $1.3312, still above a seven-week low near $1.3213 hit late last week, but down from the previous day's high of around $1.3443.
Inter bank buy/sell rates for the taka against the dollar on Wednesday. 76.92-76.95 (previous 76.82-76.90) Call Money Rates: 06.50-08.00 percent (previous 06.30-08.00 percent).
The yuan closed down slightly against the dollar on Wednesday, with demand for the US currency in the late session offsetting a stronger mid-point fixing by the People's Bank of China.
Report also said that the dollar was trading versus the Indian rupee at Rs 52.14 and it was trading against the Malaysian ringgit at 3.1680.
In the fourth Asian trade, the euro steadied after rallying the previous day as major central banks acted together to ease a credit squeeze stemming from the euro zone's debt crisis, while the Australian dollar gave back some of its hefty gains.
The euro hovered around $1.3451, having jumped to a one-week high of $1.3533 on Wednesday after central banks of the United States, euro zone, Canada, Britain, Japan and Switzerland lowered the cost of dollar loans to the banking system.
Inter bank buy/sell rates for the taka against the dollar on Thursday. 76.98-77.01 (previous 76.92-76.95) Call Money Rates: 06.25-08.00 percent (previous 06.50-08.00 percent).
The yuan ended up against the dollar on Thursday but traded below the Chinese central bank's mid-point, as the market showed still decent dollar demand at the year-end. The dollar was trading versus the Indian rupee at Rs 51.80 and it was available at 3.1440 versus Malaysian ringgit.
In the final Asian trade, the euro struggled to make much headway, consolidating this week's gains as traders stuck to the sidelines ahead of a crucial US jobs report and event-packed week that could prove decisive for the currency bloc.
The non-farm payrolls report is expected to show an increase of 122,000 jobs and a steady unemployment rate of 9.0 percent. A positive surprise would underpin a recent string of solid US data and bolster risk sentiment, while a weaker-than-expected outcome could prompt investors to take more profits on recent gains.
The dollar versus the Indian rupee was available at Rs 51.35, against the Malaysian ringgit it was at 3.1290 per unit and dollar was at 6.3627 in relation to the Chinese yuan.
Reuters adds: At the week-end, the euro faced make-or-break time ahead of a European Central Bank meeting and a European Union summit next week, as the single currency fell against the dollar on Friday for the first time in five sessions.
Investors were wary of placing aggressive bets in favour of the 12-year-old currency ahead of the ECB meeting next Thursday and the EU summit the following day. French and German leaders are to meet on Monday to outline joint proposals to be discussed at the EU meeting.
OPEN MARKET RATES: On November 28, the rupee lost 30-paisa against the dollar for buying and selling at Rs 88.15 and Rs 88.35. The rupee gave up its firmness versus the euro, shedding 87-paisa for buying and selling at Rs 116.90 and Rs 117.40, they said.
On November 29, the rupee, however, gained 5-paisa paisa against the dollar for buying and selling at Rs 88.10 and Rs 88.30. The rupee lost 51-paisa in terms of the euro, losing 51-paisa for buying and selling at Rs 117.41 and Rs 117.91, they said. On November 30, the rupee shed 10-paisa against the dollar for buying and selling at Rs 88.20 and Rs 88.40. The rupee, however, gained 80-paisa in terms of the euro for buying and selling at Rs 116.61 and Rs 117.11. On December 1st, the rupee followed the same path in terms of the dollar, shedding 40-paisa for buying and selling at Rs 88.60 and Rs 88.80. The rupee also came down versus the euro fell sharply by Rs 1.73 for buying and selling at Rs 118.34 and Rs 118.84.
On December 2nd, the rupee shed 20-paisa against the dollar for buying at Rs 88.80 and it also fell by 40-paisa for buying at Rs 89.20. The rupee also lost its firmness versus the euro, losing 49-paisa for buying and selling at Rs 118.83 and Rs 119.33, they said. On December 3rd, the rupee shed 50-paisa against the dollar for buying at Rs 89.30 and it also fell by 40-paisa for selling at Rs 89.60, they said. The rupee also dropped 14-paisa in relation to the euro for buying and selling at Rs 118.97 and Rs 119.47, they said.