Weaker trend was witnessed in the currency market last week ended on January 12, 2008. In the interbank dealing, the rupee lost 28 paisa against dollar for buying at 62.48 and 22 paisa for selling at 62.52.
The rupee followed the same print in the open market and lost 95 paisa for buying at 62.90 and 90 paisa for selling at 63.00 dealers said. The euro was also sharply higher by 166 paisa to Rs 92.06 and Rs 92.16, they added.
The feature of the week was that the US dollar touched the new high at Rs 63 in the open market as demand for the US currency was high by importers, analysts said, and added that importers' rush for dollars to clear the oil and major payments pushed the rupee down in both open and interbank markets. Foreign exchange reserves fell by 19 million dollars to 15.55 billion dollars in the week ended on January 5, the State Bank of Pakistan (SBP) said.
The State Bank of Pakistan (SBP) Governor, Dr Shamshad Akhtar, said in an interview that the rupee would come back to its original range.
INTER-BANK MARKET: On January 7, the rupee gained five paisa for buying at 62.20 but shed two paisa for selling at 62.30.
On January 8, the dollar gained 20 paisa for buying at 62.40 and 15 paisa for selling at 62.45. On January 9, the rupee shed 10 paisa against dollar for buying at 62.50 and 9 paisa for selling at 62.54.
On January 10, the rupee lost 15 paisa against dollar for buying at 62.65 and 16 paisa for selling at 62.70.
On January 11, the rupee managed to hold its overnight levels against the dollar for buying and selling at 62.65 and 65.70. On January 12, the rupee recovered 17 paisa against US currency for buying at 62.48 and 18 paisa for selling at 62.52 following intervention by the State Bank of Pakistan (SBP), experts said.
WORLD MARKET SCENARIO: In the first session of the week, the dollar edged up from a six-week low against the yen on as Japanese investors stepped in to buy after its slide late last week on poor US jobs data that bolstered expectations for an aggressive Fed rate cut.
The dollar also staged a slight rebound in Asia trade after some traders were disappointed the weak payrolls report did not spark a deeper retreat in the US currency, prompting them to reverse short positions.
In the second session, the dollar held steady against the yen, getting some respite after hitting a six-week low last week on poor US jobs data that bolstered expectations for an aggressive Federal Reserve rate cut.
The yen slid against the euro and high-yielding currencies as stability in Asian equity markets eased risk aversion and prompted investors to step back from unwinding carry trades.
During the third session, the yen slipped broadly as Asian stock markets rose and a report that the White House is preparing a tax break plan to help the economy prompted investors to shift back into risky positions such as carry trades.
In the forth session, the dollar held near a nine-month high against sterling on Thursday on rising expectations that the Bank of England will cut interest rates later in the day amid growing concerns about Britain's economic outlook.
The yen edged up from overnight lows against the dollar as Tokyo shares struggled and kept investors cautious of holding risky positions such as carry trades.
During the final round of the week, the dollar hovered near a five-week low against the euro after tumbling the previous day when comments from Federal Reserve Chairman Ben Bernanke suggested an aggressive half-point rate cut is coming later in the month.
Bernanke said the Fed was ready to take substantial additional action to boost the economy, though the central bank was not forecasting a recession.
OPEN MARKT RATES: On Monday, the rupee lost 15 paisa against dollar for buying at 61.95 and 20 paia for selling at 62.10, dealers said. The euro was at Rs 90.40 and 90.50.
On Tuesday, the rupee shed 20 paisa against dollar for buying at 62.15 and 15 paisa for selling at 62.25, dealers said. The rupee lost 25 paisa versus euro for buying and selling at Rs 90.65 and Rs 90.75, they said.
On Wednesday, the rupee shed15 paisa against dollar for buying and selling at 62.30 and 62.40, dealers said. The rupee also lost 28 paisa versus euro for buying and selling at Rs 90.93 and Rs 91.03, they said.
On Thursday, the rupee lost 20 piasa in terms of dollar for buying and selling at 62.50 and 62.60, dealers said. The rupee also shed 14 paisa versus euro for buying and selling at Rs 91.07 and Rs 91.17, they said.
On Friday, the rupee lost sharply by 60 paisa against dollar in a single-day slide for buying and selling at 62.90 and 63.00 due to massive buying by banks, dealers said. The rupee also dropped 118 paisa in relation to euro for buying and selling at Rs 92.25 and Rs 92.35, they said.
On Saturday, the rupee somehow managed to hold on to its overnight levels against dollar for buying and selling at 62.90 and 63.00 despite strong demand by the buyers, dealers said. The rupee gained 19 paisa versus euro for buying and selling at Rs 92.06 and 92.16 in process of trading, they said.
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