The rupee, somehow, managed to recover modestly against both dollar and euro during the week ended on February 6, 2010. On the interbank market, the rupee rose by seven paisa versus US currency for buying at 84.98 and eight paisa for selling at 85.02.
On the open market, it was up by 10 paisa in relation to dollar for buying and selling at 86.10 and 86.20. It lost 15 paisa versus euro for buying and selling at Rs 118.65 and Rs 119.15.
The rupee gains were due to slight improvement in the supply of dollars. In the meantime, the foreign exchange reserves fell to 14.52 billion dollars from 15.10 billion dollars.
Finance Minister Shaukat Tarin was optimistic as he said that Pakistan was unlikely to enter another lending programme with the International Monetary Fund (IMF), but a final decision on that would be taken towards the end of the year.
He said that foreign exchange reserves were likely to reach $20 billion or more by the end of the year. This factor may help the rupee to resist its gains versus dollar because oil payments were going up day by day. And this was a chief reason which was pushing the dollar demand higher by the importers.
INTER-BANK RATES: On Monday, the rupee shed two paisa against dollar for buying and selling at 85.07 and 85.12.
On Tuesday, the rupee appreciated by 17 paisa against dollar for buying and selling at 84.90 and 84.95. On Wednesday, the rupee held the overnight levels in relation to dollar for buying and selling at 84.90 and 84.95.
On Thursday, the rupee shed one paisa versus dollar for buying and selling at 84.91 and 84.96.
On Friday, the market was closed due to Kashmir Solidarity Day holiday. On Saturday, the rupee slid by seven paisa versus greenback for buying at 84.98 and six paisa for selling at 85.02.
OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, the dollar held at its highest levels in six months, while the euro huddled near seven-month lows on fiscal concerns, and higher yielding currencies remained pressured by the closing of leveraged trades.
The Australian dollar hovered at its weakest since mid-December as investors briefly unwound yen-funded carry trades on a report that a UK regulator would like to restrain carry trading generally.
During the second Asian session dollar steadied on Tuesday after falling away from six-month highs on a basket of currencies, while the Australian dollar retained broad gains ahead of a widely expected interest rate hike later in the day.
The yen was broadly lower as risk appetite improved just a little after strong US manufacturing data which helped Wall Street regain some ground and Asian shares followed suit. During the third Asian trade, higher yielders such as the Australian dollar gave back small gains on the yen and dollar as caution set in before an EU assessment of Greece's fiscal plan on Wednesday and key US jobs data at the end of the week.
Short-term speculators had earlier picked up bargains in beaten-down growth-linked currencies such as the Aussie following strong US earnings and improved housing data, which helped lift appetite for slightly riskier assets, market players said.
In the process of fourth Asian trading, the dollar was broadly steady after blipping higher as the New Zealand dollar tumbled on a jump in unemployment and the Australian dollar slipped on data showing a dip in monthly retail sales.
The New Zealand dollar hit a five-month low of $0.6960 after data showed the country's jobless rate rising to a 10-year high, prompting markets to scale back expectations of an interest rate rise before mid year.
Amid final session of Asia, Switzerland's central bank was seen selling francs in Asian trading time, sending the euro leaping higher after it hit a 15-month low against the franc and helping it rise above an eight-month trough against the dollar.
The euro has been under relentless selling pressure in the past month on concerns about sovereign debt problems in the euro zone, first in Greece and then in Spain and Portugal.
At week-end, in New York, the euro fell to its lowest level against the dollar since May on Friday over worries about the fiscal stability of the 16-nation euro zone currency bloc.
The euro tumbled as the cost of insuring debt of Greece, Portugal and Spain against default hit record highs on worries about their fiscal positions. Portugal backed a law that may push its swollen budget deficit higher, causing further jitters.
Assailed by doubts about record US deficits and its future status just months ago, the dollar has since been anointed the best of a bad bunch and is set to extend gains, especially against the euro, in the week ahead.
The euro lost 1.5 percent of its value against the dollar this week and was 4.6 percent weaker so far this year, beset by a severe debt crisis in Greece and worries about the finances of other euro zone members, including Portugal and Spain.
OPEN MARKET RATES: On February 1, the rupee gained 5 paisa versus dollar for buying and selling at 86.15 and 86.25. The local currency lost 60 paisa versus euro for buying at Rs 119.10 and Rs 1.60 for selling at Rs 120.60.
On February 2, the rupee gained five paisa in terms of dollar for buying and selling at 86.10 and 86.20. The rupee also recovered 10 paisa versus euro for buying at Rs 119.00 and Rs 1.10 for selling at Rs 119.50.
On February 3, the rupee managed to retain its level versus the greenback for buying and selling at 86.10 and 86.20. The rupee, however, lost 55 paisa in terms of euro for buying and selling at Rs 119.55 and Rs 120.05.
On February 4, the rupee lost 10 paisa against dollar for buying at 86.20 and 20 paisa for selling at 86.40. The rupee also appreciated by 90 paisa versus the euro for buying and selling at Rs 118.65 and Rs 119.15.
For Kashmir day holiday on February 5, the market was closed and the next day, the open market kept the shutter down on February 6, after killing of 25 people in separate two bomb explosions in Karachi on Friday.
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