THE RUPEE: mixed patterns

The rupee resisted steep loss against dollar on the currency market during the week ended on August 6, 2011. In the inter-bank dealings, the rupee shed two paisa in relation to dollar for buying and selling at 86.57 and 86.62.
On the open market, the rupee, gained 15 paisa versus greenback at 86.00 and 86.20. The rupee also gained 83 paisa in relation to euro for buying and selling at Rs 122.87 and Rs 123.37.
It is most likely that the remittances may go up and help the rupee to recover most ground in the coming days. It was noticed that sale of British pound, Canadian dollar, euro, Saudi riyal and other currencies from the Middle East countries has suddenly increased, reflecting higher inflows in days to come.
Foreign exchange reserves hit 18.31 billion dollars as a result of rising trend in remittances and export receipts, which helped the reserves to maintain stable position.
The emerging news, which jolted the whole world, is that the United States lost its top-notch 'AAA' (Triple A) credit rating from Standard & Poor's on Friday in an unprecedented reversal of fortune for the world's largest economy.
S&P cut the long-term US credit rating by one notch to 'AA-plus' on concerns about the government's budget deficits and rising debt burden. The move is likely to raise borrowing costs eventually for the American government, companies and consumers.
The S&P said in a statement that the downgrade "reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics". How the world economy reacts next week to the downgradation of the long-term US credit rating? It was no doubt that all eyes were set on the market to observe the reaction the week opening day.
INTER-BANK MARKET: On Monday, the rupee fell sharply against US currency losing 23 paisa for buying at 86.78 and 21 paisa for selling at 86.80.
On Tuesday, the rates were not issued due to holiday on account of Zakat reduction by banks.
On Wednesday, the rupee shrugged of the overnight weakness in relation to dollar, recovering 24 paisa for buying at 86.54 and 22 paisa for selling at 86.58.
On Thursday, the rupee retained its overnight gains versus dollar, rising further 34 paisa for buying at 86.20 and it also picked up 33 paisa for selling at 86.25.
On Friday, the rupee retained its overnight levels against dollar for buying and selling at 86.20 and 86.25.
At the week-end, the rupee lost 37 paisa against dollar for buying and selling at 86.57 and 86.62.
OVERSEAS MARKET OUTLOOK FOR MAJOR CURRENCIES: In the first Asian trade, the dollar enjoyed a relief rally against yen and Swiss franc on Monday as US lawmakers clinched a deal to trim fiscal spending, easing concerns of an imminent US debt default and prompting traders to unwind safe haven plays.
Commodity currencies climbed with New Zealand dollar hitting a fresh post-float high against US dollar, and Australian dollar nearing a 29-year peak hit previous week.
The yuan closed up against dollar after hitting a record trading high, as the People's Bank of China set an all-time high mid-point fixing, following the sinking dollar index. Inter bank buy/sell rates for taka against dollar were 74.68/74.75 (previous 74.74/74.75) and Call Money Rates: 6.75-12.00 percent (previous 6.75-12.00 percent).
In the second Asian trade, the safe-haven Swiss franc gained on worries about the global economy even as the US looked to have averted a debt default after the House of Representatives approved an 11th hour deal to raise the government's borrowing limit.
Strength in yen also drew more warnings from Japanese officials about possible intervention and nudged the Bank of Japan closer to a further easing in policy.
The yuan closed down slightly versus dollar after People's Bank of China set a weaker mid-point, following a slight rebound in dollar index after passage of a last-minute deal to raise the US borrowing limit.
Inter bank buy/sell rates for taka against dollar were 74.72/74.7350 (previous 74.68/74.75) and Call Money Rates 7.00-12.00 percent (previous 6.75-12.00 percent). Indian rupee was trading at Rs 44.07 versus dollar and Malaysian ringgit was at 2.9470.
In the third Asian trade, the Australian and New Zealand dollars stayed under pressure as a wave of risk-aversion swept through global markets and led some investors to wager interest rates would have to be cut in Australia to avoid recession.
In fact, so strong was demand for safe-haven government bonds that yields were driven to the lowest since mid-2009. Yields on the Australian 10-year paper sank below the 4.75 percent cash rate to a low of 4.58 percent, an inversion often associated with recession fears.
Inter bank buy/sell rates for taka against dollar were 74.71/74.72 (previous 74.7200/74.7350) and Call Money Rates 7.00-10.00 percent (previous 7.00-12.00 percent).
The yuan rose slightly versus dollar even after People's Bank of China set a weaker mid-point, as the Chinese currency's upward path appeared intact amid volatility in dollar, while the United States struggled with its debt woes. Indian rupee was trading at Rs 44.27 versus dollar and Malaysian ringgit was at 2.9765k.
In the fourth Asian trade, yen slid 2 percent versus dollar as Japan intervened to curb yen strength to support its export-led economy one day after Swiss central bank unveiled a shock cut in interest rates to cap a soaring Swiss franc.
Japanese Finance Minister Yoshihiko Noda confirmed that Tokyo had intervened in the currency market, adding that Japan had intervened by itself and that Japan was communicating with other countries on the move.
Indian rupee was trading at Rs 44.31 versus dollar, Malaysian ringgit at 2.9715, and Chinese yuan was available at 6.436.
Bangladesh inter bank buy/sell rates for taka against dollar were 74.69/74.75 (previous 74.71/74.72) and Call Money Rates 7.00-11.00 percent (previous 6.75-12.00 percent.
In the final Asian trade, the dollar spiked higher against yen, but the bounce was short-lived and traders later said the rise was unlikely to have been caused by intervention.
The dollar rose from around 78.50 yen to an intraday high of 79.42 yen in a matter of minutes, stirring talk that Japan may have intervened in the currency market.
But the dollar later gave up its gains and was last down 0.3 percent at 78.64 yen, and traders played down the talk of possible intervention, with US and European banks cited as dollar buyers earlier.
Indian rupee was trading at Rs 44.54 versus dollar, Malaysian ringgit at 3.0060 in terms and Chinese yuan was at 6.4442.
On Friday, the US dollar fell broadly, as Wall Street stocks rebounded and traders feared a downgrade to the United States' credit rating was imminent.
The euro got an added boost after Italy's Prime Minister Silvio Berlusconi pledged to speed up austerity measures and bring the country's budget into balance by 2013.
The news helped the temporarily calm markets a day after US stock indexes posted their worst losses in two years. The dollar rallied on Thursday after Japan intervened to curb yen strength and on worries that the euro zone debt crisis was spreading.
A report showing stronger-than-expected US jobs growth in July assuaged some concerns that the economy was slipping back into a recession, but investors remained jittery.
OPEN MARKET RATES: On August 1, the rupee shed five paisa in relation to US currency for buying at 86.20 while it managed to keep weekend level for selling at 86.35. The rupee shed 57 paisa against euro,for buying and selling at Rs 124.27 and Rs 124.77.
On August 2, the rupee gained five paisa in relation to US currency for buying at 86.15 while it did not show any change for selling at 86.35. The rupee gained Rs 1.82 against euro for buying and selling at Rs 122.45 and Rs 122.95.
On August 3, the rupee rose by 15 paisa versus US currency for buying and selling at 86.00 and at 86.20. The rupee surged by 53 paisa versus euro for buying and selling at Rs 121.92 and Rs 122.42.
On August 4, the rupee did not show any change against the US currency for buying and selling at 86.00 and 86.20, while it lost 82 paisa for buying and selling at Rs 122.74 and Rs 123.24.
On August 5, the rupee maintained its level against US currency for buying and selling at 86.00 and 86.20, while it recovered Rs 1.76 in terms of euro for buying and selling at Rs 120.98 and Rs 121.48.
On August 6, the rupee maintained its levels against US currency for buying and selling at 86.00 and 86.20, while it lost Rs 1.89 in terms of euro for buying and selling at Rs 122.87 and Rs 123.37.