The rupee remained under pressure against dollar during the week ended on March 29, 2008. In the interbank market, the rupee lost 48 paisa against dollar for buying and selling at 62.68 and 62.72. However, in open market, it gained slightly by five paisa for buying and selling at 63.15 and 63.25 amid higher demand for the US currency.
The rupee fell sharply against the euro for buying and selling at Rs 99.55 and 99.65 as the dollar started trimming its gains versus the world major currencies. During the increased demand for dollars by the importers, the rupee did not look ahead in the interbank market. It is an open secret that the rupee may not be able to look ahead due to high demand of dollars for costlier payments after the steep rise in the oil prices.
In the meantime, the rupee is likely to resist drastic cut in its value on the back of remittances, sending by the overseas Pakistanis. The other factor is expectations for the inflows of dollars by the foreign investment after an apparent settlement of the new government.
But high prices of oil turned the bills costlier and pushed the demand for the US currency higher in the local market. According to central bank data, remittances from overseas Pakistanis jumped 21 percent to 4.13 billion dollars in the first eight months of the 2007/08 July-June fiscal year.
The rupee hit 63.11 and 63.14 for a dollar on February 16, its weakest level in more than six years, but started recovering when sentiment was boosted by a generally smooth election on February 18, 2008. It was hoped that after the election of the Prime Minister, the economy was likely to move in the right direction and textile industry may also show improvement with other sectors, which is leading source of earning foreign exchange for the country.
In Asian trading, the dollar slid against yen after soft US economic data eroded recent optimism that the fallout from the subprime loan crisis might be easing. But the greenback recovered some ground against the euro after tumbling in overseas trade following an unexpectedly strong report on eurozone business confidence.
The dollar dropped to 98.75 yen in Tokyo late morning trade from 99.11 in New York late Wednesday. The euro fell to 1.5802 dollars from 1.5845 and to 156.02 yen from 157.08.
Overnight, the US government reported an unexpected 1.7 percent decline in durable goods orders in February and a 1.8 percent fall in new home sales. "The weak data on durable goods and the US housing market are keeping the dollar under pressure," said Kanako Oikawa, a currency strategist at Traders Securities. According to the weekly State Bank of Pakistan (SBP) data, the reserves fell to 13,499.1 million dollars.
INTERBANK MARKET RATE: On Monday, the rupee recovered versus dollar, gaining 64 paisa for buying at 62.20 and rising by 61 paisa for selling at 62.25, dealers said. On Tuesday, the rupee lost 40 paisa versus dollar for buying at 62.60 and 37 paisa for selling at 62.62, dealers said.
On Wednesday, the rupee dropped 20 paisa for buying versus dollar at 62.80 and 22 paisa for selling at 62.84, dealers said. On Thursday, the rupee remained stable in terms of US currency for buying and selling at 62.80 and 62.84, they said.
On Friday, the rupee stayed put for buying in relation to dollar at 62.80 while it failed to perform the same, recovering two paisa for selling at 62.82, they said. At the weekend, the rupee rose by 12 paisa against dollar for buying at 62.68 and it also appreciated by 10 paisa for selling at 62.72 during the trade, they said.
WORLD VALUE OF DOLLAR: The dollar moved both ways during the week. In the first session of the week, the dollar was slightly higher against other major currencies in Asian trade as investors waited to see whether the worst of the recent credit market turmoil might be over.
The dollar edged up to 99.77 yen in Tokyo morning trade from 99.62 in late trade here on Friday, when the US and European financial markets were closed for the Easter holidays. The euro slipped to 1.5399 dollars from 1.5442 and to 153.64 yen after 153.78.
In Asia, during the second trade, the yen lost ground as a higher offer for troubled Wall Street giant Bear Stearns and a surprise rebound in existing US home sales helped calm market jitters, dealers said. A renewed appetite for risk was benefiting high-yielding currencies at the expense of low-return ones such as the yen.
During middle of the week, the dollar moved cautiously against the leading currencies of the world. In the final session, the dollar was steady against the euro and the yen as dealers sought fresh clues on the health of the faltering US economy.
The dollar was quoted at 99.64 yen in Tokyo afternoon trade, little changed from 99.59 in New York late Thursday. The euro rose to 1.5790 dollars from 1.5778 and to 157.31 yen from 157.20.
Investors were waiting for the release of US consumer In the final session, the dollar fell against yen in NY trade as investors worried that the credit crisis that has fractured the US financial sector was far from over, pushing stocks lower.
OPEN MARKET RATES: On March 24, the rupee shed five paisa against the greenback for buying and selling at 63.20 and 63.30, dealers said. The rupee maintained its upward trend in relation to euro, rising 29 paisa for buying and selling at 96.80 and Rs 96.90, they said.
On March 25, the rupee gained 50 paisa in relation to dollar for buying at 62.70 and 45 paisa for selling at 62.85, dealers said. The rupee fell by 45 paisa against euro for buying and selling at 97.25 and 97.35, they said. The rupee depreciated versus the single European currency as the US currency was again on the downside on the world market, they said.
On March 26, the rupee lost 35 paisa for buying in relation to the US currency at 63.05 and 25 paisa for selling at 63.10, dealers said. The rupee fell by 85 paisa against euro for buying at 98.10 and 75 paisa for selling at 98.30, they said.
On March 27, the single European currency expanded its winning ground in terms of the local currency, rising Rs 1.20 for buying and selling at Rs 99.30 and Rs 99.40, dealers said. The rupee also continued its overnight fall versus the dollar, shedding five paisa for buying at 63.10 and it also lost 10 paisa for selling at 63.20, they said.
On March 28, the rupee held its overnight levels against the dollar for buying and selling at 63.10 and 63.20, respectively. The dollar's steadiness in the world market did not permit the euro to look ahead versus the rupee, keeping at the overnight levels for buying and selling at Rs 99.30 and Rs 99.40, they said.
On March 29, the rupee shed five paisa against the dollar for buying and selling at 63.15 and 63.25, respectively. The euro started riding over the US currency, gaining 25 paisa versus the rupee for buying and selling at 99.55 and 99.65, they said.
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