The rupee moved both ways on the currency market during the shortened week ended on November 14, 2009. On the interbank, the rupee gained 10 paisa versus dollar for buying at 83.44 and 21 paisa for selling at 83.48. On the open market, the rupee lost 10 paisa in terms of dollar for buying and selling at 83.60 and 83.70.
The rupee also gained 20 paisa versus euro for buying and selling at Rs 123.65 and Rs 124.15. The rupee showed slight improvement against dollar as it some times depicted light fluctuation due to easy supply of dollars. Positive trend in the remittances helped the supply of dollars.
In the meantime, the Federal Bureau of Statistics said that the trade deficit widened to 1.37 billion dollars in October compared with 1.98 billion dollars in October last year. The deficit was 897 million dollars in September. Exports stood at 1.59 billion dollars in October against 1.48 billion dollars in the same month last year. Imports were worth 2.97 billion dollars in October compared with 3.46 billion dollars in the same month last year.
The trade deficit in the 2008/09 (July-June) fiscal year narrowed to 17.04 billion dollars compared with 20.91 billion dollars in the 2007/08 fiscal year. According to the State Bank of Pakistan (SBP), the foreign exchange reserves were at 14.272 billion dollars last week.
INTER-BANK MARKET RATES: On Monday, all commercial centres were closed due to Allama Iqbal Day holiday. On Tuesday, the rupee gained 14 paisa versus dollar for buying at 83.40 and 24 paisa at 83.45.
On Wednesday, the rupee shed 5 paisa in terms of dollar for buying and selling at 83.45 and 83.50.
On Thursday, the rupee retained its overnight levels versus the dollar for buying and selling at 83.45 and 83.50. On Friday, the rupee gained 5 paisa versus dollar for buying and selling at 83.40 and 83.45.
On Saturday, the rupee lost four paisa in relation to the US currency for buying 83.44 and three paisa for selling at 83.48.
OVERSEAS VALUE OF DOLLAR: In the first Asian trade, the dollar fell after a G20 meeting and US unemployment data did little to alter the view that US rates would stay low for a while, supporting shares and the Australian and New Zealand dollars.
Amid second Asian trade, the dollar hovered just above a 15-month low against a basket of currencies as investors looked to return to leveraged carry trades, while sterling tumbled after a warning on Britain's credit rating.
Fitch Ratings said that of the four major economies with AAA status, the UK was the most at risk, sending the pound down sharply to shed as much as 1 percent on the day against the dollar before it recovered half a cent from the lows.
In the third Asian trade, the yen tested higher ground, buoyed by stop-loss buying and eking out gains against the high-yielding Australian dollar after a mixed batch of Chinese economic data.
The yen fell initially after the figures showed Chinese industrial output and retail sales rose a bit more than expected in October from year earlier, but then gained on more numbers showing a dip in the pace of investment and loan growth and lower than forecast exports and imports.
Amid fourth Asian trade, the dollar was on slippery ground after the Australian dollar jumped to a 15-month high on strong jobs data that boosted expectations of an interest rate hike next month.
The Aussie was also buoyed by firm commodity prices like gold, which hit a record high for the second straight day. Amid fourth Asian trade, the dollar was on slippery ground after the Australian dollar jumped to a 15-month high on strong jobs data that boosted expectations of an interest rate hike next month.
In Asian final session, the dollar clung to gains after another sporadic bout of profit-taking in riskier trades that has characterised the currency's eight-month bear trend.
But traders said dollar short-covering, prompted by softer equities and a fall in oil, had slowed in Asian time, and the US currency's broad weakness was likely to continue over the longer term.
At the week-end, the dollar fell broadly on Friday after data showing a wider US trade deficit and weaker consumer sentiment reinforced views that the United States may return to economic health more slowly than other countries.
A brighter outlook abroad, including a report showing the euro zone may have exited recession in the third quarter, boosted the euro and also encouraged investors to buy stocks and high-yielding currencies such as the Australian dollar.
The dollar ended the week down about 0.5 percent against a basket of major currencies, its fourth weekly decline in the last five weeks.
In the meantime, investors are likely to resume selling the dollar next week, reinforcing a trend that has been in place since October on the view that US interest rates will remain low even as global economic health improves.
US economic data will likely play a starring role in driving the dollar's direction, analyst say, with an October retail sales report kicking things off on Monday.
"Next week's data would determine whether this dollar downtrend will continue, and retail sales is crucial," said Kathy Lien, FX research director at GFT in New York.
OPEN MARKET: On November 10, the rupee posted 15 paisa gain versus dollar for buying and selling at 83.65 and 83.75. The rupee, however, lost 70 paisa in relation to euro for buying at Rs 124.55 and 20 paisa for selling at Rs 125.05.
On November 11, the rupee did not show any change against dollar for buying and selling at 83.65 and 83.75. The rupee, however, gained 50 paisa versus the single European currency for buying and selling at Rs 124.05 aand Rs 125.55.
On November 12, the rupee gained 20 paisa against dollar for buying and selling at 83.45 and 83.55. The rupee also gained 15 paisa in terms of euro for buying at Rs 123.90 and by Rs 1.15 for selling at Rs 124.40.
On November 13, the rupee rose by 5 paisa against dollar for buying and selling at 83.40 and 83.50. The rupee also gained 50 paisa in terms of euro for buying and selling at Rs 123.40 and Rs 123.90.
On November 14, the rupee lost 20 paisa in terms of dollar for buying and selling at 83.60 and 83.70. The rupee also lost 25 paisa versus euro for buying and selling at Rs 123.65 and Rs 124.15.
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