The rupee lost its ground moderately versus the dollar amid persistent demand for the greenback in the currency market last week.
It lost five paisa in relation to the dollar for buying and selling at Rs 57.48 and Rs 57.49. In the kerb market, the rupee moved both ways as it shed three paisa on the buying counter at Rs 57.48, and gained the same amount on the selling side at Rs 57.53.
The euro maintained its winning spree, picking up Rs 1.17 versus the rupee for buying and selling at Rs 73.53 and Rs 73.83.
The dollars' increased buying by the banks pushed the rupee value down, experts observed. Commenting on the rupee's weakness versus the greenback, they said the heavy payments and slight fall in remittances apparently were the leading factors for the rupee's decline in relation to the dollar.
The market sources said the rupee might not lift from the bottom side because the government has to retire one billion dollars of Asian Development Bank (ADB) debt in early February 2004.
They said the impact of emerging positive developments on the political front would bring pleasing change on the economic side, and increase foreign investment in the country.
Analysts were hoping that after the South Asian Association for Regional Co-operation (Saarc) summit, the relation between India and Pakistan would improve in the coming days.
Explaining the European single currency's direction versus the major currencies, some leading dealers said the euro climbed to touch the new high versus the dollar in the world markets amid persistent worries about the widening US current account deficit and budget deficit.
They said US economy appears to have turned the corner, and the central bank is right to hold interest rates at 45-year low given the low rate of underlying inflation.
According to market analysts, due to surging demand for the euro in the world markets, it crossed the barrier of Rs 73, and heading to break new barrier of Rs 74.
In the middle of the week, the euro suffered and lost nearly two percent versus the dollar on speculations that the European Central Bank may take few measures to halt euro's unprecedented rise in its annual meeting.
Later, it came back to its old pattern, and started new journey to see colours of sky.
The euro strengthened in the world and the local markets as the European Central Bank (ECB) did not make hue and cry over the single currency's upward trend versus the world currencies, and adopted a wait-and-see mood.
In the meantime, ECB chief Trichet said the euro's record-breaking rally versus the dollar hit the euro-zone exports, but, he was convinced that rising world demand should mitigate the impact of the euro's rise versus the dollar and the yen.
In the meantime, some market players said the investors were fed up with the dollar's slide, shifting their portfolios from dollars to euros.
Generally, it was noticed that falling rates of bank deposits and saving schemes disappointed the small holders because of lacklustre return.
The continued fall in the dollar's value against the Japanese currency convinced some dealers that Japan's authorities were buying the greenback versus the yen to protect domestic export competitiveness, said overseas currency experts.
KERB MARKET RATES: On January 5, the rupee extended its weekend's slide versus the dollar in the kerb market, losing seven paisa for buying and selling at Rs 57.45 and Rs 57.55, dealers said.
According to market sources, the rupee-dollar parity rates came under pressure as banks' demand for dollars increased as Monday was the first day after long holidays in the international markets due to Christmas and the New Year holidays.
The euro gained 35 paisa versus the rupee for buying and selling at Rs 72.36 and Rs 72.65, respectively.
On January 6, it hit the new high at Rs 73 versus the euro after picking 50 paisa for buying at Rs 72.85 and Rs 73.15, respectively.
The rupee showed mixed trend versus the dollar for buying and selling at Rs 57.47 and Rs 57.52, moneychangers said.
On January 7, falling trend in the euro's value globally pressurised the single European currency to surrender its overnight gains in the kerb market on Wednesday, losing 25 paisa versus the rupee for buying and selling at Rs 72.60 and Rs 72.90, respectively, while in the process of trading, the rupee maintained its overnight levels versus the dollar for buying and selling at Rs 57.47 and Rs 57.52.
On January 8, the euro came under pressure versus the rupee, shedding 60 paisa more for buying and selling at Rs 72.10 and Rs 72.30.
The rupee maintained its prevailing levels in relation to the dollar for buying and selling at Rs 57.45 and Rs 57.55 as market players noted that there was no let-up in banks' dollar buying for heavy payments.
On January 9, the euro gave up its overnight weakness versus the rupee, recovering about rupee one for buying and selling at Rs 73.02 and Rs 73.30, respectively.
The rupee, however, maintained its overnight levels versus the dollar for buying and selling at Rs 57.45 and Rs 57.55.
At the weekend, the rupee shed three paisa against the dollar for buying at Rs 57.48 and it gained two paisa on the selling counter at Rs 57.53.
INTERBANK RATES: On Monday, the rupee-dollar parity rate did not fluctuate sharply for buying and selling at Rs 57.42 and Rs 57.44.
The greenback may gain slightly in the coming days, market men said.
On Tuesday, the rupee rates maintained their overnight levels versus the dollar for buying and selling at Rs 57.42 and Rs 57.43 amid persistent demand for the dollars.
On Wednesday, the rupee-dollar parity rate did not fluctuate sharply for buying and selling at Rs 57.42 and Rs 57.44.
The greenback may gain slightly in the coming days, market men said. On Thursday, the rupee held its overnight levels versus the dollar for buying and selling at Rs 57.43 and Rs 57.44, respectively.
According to market sources, the rupee did not show any improvement due to banks' demand for Hubco's payment of nearly 50 million dollar, kept the dollar demand unchanged in the interbank market.
On Friday, heavy pressure on the buying side, kept the rupee in the minus column, losing four paisa versus the dollar for buying and selling at Rs 57.46 and Rs 57.47, respectively.
On Saturday, the rupee shed one paisa versus the dollar for buying and selling at Rs 57.48 and Rs 57.49, respectively.
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