The rupee moved both ways against dollar in the interbank and open markets during the week ended on January 14, 2007. In the interbank market, the rupee recovered 3 paisa against dollar for buying and selling at 60.95 and 60.97, respectively.
It followed the same trend in relation to dollar in the open market, picking up 10 paisa for buying and selling at 60.88 and 60.98, while it slipped versus euro for buying and selling at Rs 78.58 and Rs 78.68.
Money market experts said that the rupee's modest gain was due to selling of dollars by exporters and sizeable remittances by overseas Pakistanis on Eid-ul-Azha occasion. They said that in the near future, the rupee's fluctuation in relation to dollar is likely to be slight as supply of the US currency would be normal. But if the demand for dollars by the corporate sector increased, the rupee might go down; otherwise, the rupee would continue its journey smoothly.
According to reports, due to significant rise in imports the country's trade deficit increased by 15.28 percent during the first half of current fiscal year (July-December) 2006-07 over the same period of last year.
INTER-BANK RATES: On Monday, the dollar crossed an important mark of Rs 61 in the interbank market in the beginning of the week due to strong demand for dollars at Rs 60.98 and Rs 61.00 for buying and selling, dealers said.
On Tuesday, the rupee lost one paisa against dollar for buying at Rs 60.99, but was unchanged at for selling at Rs 61.00.
On Wednesday, the rupee maintained its overnight levels in relation to dollar for buying and selling at Rs 60.99 and Rs 61.00.
On Thursday, the rupee gained 3 paisa against dollar for buying and selling at Rs 60.96 and Rs 60.97, respectively.
On Friday, the rupee picked up 3 paisa for buying at Rs 60.93 and 2 paisa for selling at Rs 60.95.
On Saturday, the rupee could not retain its overnight gains against dollar, and lost 2 paisa for buying and selling at Rs 60.95 and Rs 60.97.
WORLD MARKET SCENARIO: At the starting session of the week, the dollar maintained its appreciation against leading currencies. On Tuesday, the dollar moved both ways against leading currencies.
On Wednesday, the dollar notched up gains against euro and yen in Asian trade on the back of a sharp drop in oil prices and easing expectations of a US interest rate cut.
Yen's losses were limited, however, by speculation about a possible rise in Japanese interest rates next week.
In the middle of the week session, the dollar gave up its weakness. In the overseas markets, the dollar retreated from 1-1/2-month highs against euro at the weekend as traders sold the currency amid speculation that gains from a three-day rally were overdone.
The dollar initially rallied after the government said that retail sales rose at their strongest pace since July last month, the key holiday shopping period.
OPEN MARKET RATES: On January 8, the rupee lost 11 paisa against dollar for buying and selling at Rs 60.98 and Rs 61.05 on rising demand for dollars, and also lost 25 paisa against euro for buying and selling at Rs 78.85 and Rs 78.95, respectively, dealers said.
On January 9, the rupee recovered 10 paisa against dollar for buying at Rs 60.88 and 8 paisa for selling at Rs 60.97, but lost 10 paisa in relation to euro for buying and selling at Rs 78.95 and Rs 79.05, respectively, moneychangers said.
On January 10, the rupee remained almost unchanged against dollar at Rs 60.87 for buying and at Rs 60.97 for selling, they said. However, it gained 45 paisa against euro for buying and selling at Rs 78.50 and Rs 78.60, respectively, they added.
On January 11, the rupee shed 3 paisa against dollar for buying and selling at Rs 60.90 and Rs 61.00, and also lost 25 paisa versus euro for buying and selling at Rs 78.75 and Rs 78.85, dealers said.
On January 12, the rupee lost 5 paisa versus dollar for buying and selling at Rs 60.95 and Rs 61.05, they said, but added that it recovered 54 paisa versus euro for buying and selling at Rs 78.21 and Rs 78.31.
On January 13, the rupee gained 7 paisa against dollar for buying and selling at Rs 60.88 and Rs 60.98, but lost 17 paisa versus euro for buying and selling at Rs 78.58 and Rs 78.68, respectively, dealers said.
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