The rupee managed to recover modestly against dollar during the week ended on February 13, 2010. On the interbank market, the rupee posted gain of four paisa versus dollar for buying and selling at 84.95 and 84.98.
On the open market, the rupee recovered 30 paisa in relation to greenback for buying and selling at 85.90 and 86.10, and it also gained sharply by Rs 2.70 in terms of euro for buying and selling at Rs 115.95 and 116.45.
Slight improvement in the supply of dollars helped the rupee to recover its ground, and it looked that the rupee might improve further in both open and interbank markets. The demand for dollars was up by importers, but measures by the State Bank of Pakistan (SBP) to bring the rupee rate at realistic levels boosted the local currency versus dollar.
In the meantime, according to the weekly statement by the State Bank of Pakistan (SBP), foreign exchange reserves fell to 14.48 billion dollars.
INTER-BANK MARKET RATE: On Monday, the rupee was up by four paisa in relation to dollar for buying at 84.94, and five paisa for selling at 84.97.
On Tuesday, the rupee gained two paisa in relation to dollar for buying at 84.92 and one paisa for selling at 84.96. On Wednesday 10, the rupee shed three paisa versus dollar for buying and selling at 84.95 and 84.99.
On Thursday, the rupee gained five paisa against dollar for buying and selling at 84.90 and 84.94.
On Friday, the rupee gained 10 paisa versus dollar for buying at 84.80 and nine paisa for selling at 84.85. On Saturday, the rupee lost 15 paisa versus dollar for buying at 84.95 and 13 paisa for selling at 84.98.
OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, the euro and growth-linked currencies were on slippery ground as risk appetite was subdued on the back of mounting fiscal worries in the eurozone and lingering concerns about a global tax on banks.
Traders said investors were sceptical of the Group of Seven's reassurance on Greece and every move up by the euro was being used as a selling opportunity.
In the second session, the euro inched up against the dollar but remained within sight of an 8-month low hit last week, dogged by persistent worries about the fiscal health of some euro zone countries.
Speculation emerged in the market that a rescue for struggling Greece would be formed soon, after news that European Central Bank President Jean-Claude Trichet is leaving a Sydney meeting of central bankers early to attend a European Council meeting. In the third Asian trade, the euro fell, trimming some of the previous day's gains, with investors awaiting details of a rescue package for Greece, keen to see how it could impact the euro zone economy.
The euro was handed a reprieve on Tuesday after a senior German ruling coalition source told Reuters that euro zone governments had decided in principle to help Greece, prompting investors to unwind short positions in the single currency.
In the fourth Asian session, the euro rose ahead of a key European Union summit that may shed light on a possible rescue package for Greece, while the Australian dollar surged as strong jobs data revived talk of a rate rise as early as March. In the final session of Asia, the euro softened across the board on Friday, weighed by disappointment among investors over lack of detail from the European Union on helping debt-laden Greece.
Commodity-linked currencies such as the Australian dollar remained buoyant but trimmed some gains made following Chinese inflation numbers the previous day, which fuelled hopes China may not need to be too aggressive near-term on tightening.
At the week-end, in NY, the euro plunged to a nearly nine-month low against the dollar after a rescue deal for debt-stricken Greece left many details unanswered, while China's surprise monetary tightening hit higher-yielding currencies. The Chinese central bank's move to raise commercial banks' reserve requirements hurt risk-taking on the view it may choke economic recovery. The move pushed the dollar index to a seven-month high and pressured the Australian dollar across the board.
The dollar is expected to post its sixth straight weekly gain against the euro in the week ahead as concerns over how Greece will service its debt obligations remain front and center on the minds of investors.
A move by China's central bank to raise commercial banks' reserves requirements for the second time this year is also likely to help the dollar as it chokes risk tolerance. While the data calendar gets heavier as the week progresses with key inflation data scheduled for release, investors and analysts say it is unlikely to derail the overall themes of the week.
ON THE OPEN MARKET: On February 8, the rupee lost 30 paisa in terms of dollar for buying and selling at 86.50 and 86.70, but it picked up 80 paisa against euro for buying and selling at Rs 117.85 and Rs 118.35.
On February 9, the rupee was down by 10 paisa versus dollar for buying and selling at 86.60 and 86.80. The rupee, however, lost 70 paisa in relation to euro for buying and selling at Rs 118.55 and Rs 119.05.
On February 10, the rupee gained 10 paisa versus dollar for buying and selling at 86.50 and 86.70. The rupee lost 30 paisa versus euro for buying and selling at Rs 118.85 and Rs 119.35.
On February 11, the rupee picked up 20 paisa versus dollar for buying and selling at 86.30 and 86.50. The rupee gained 15 paisa against euro for buying and selling at Rs 118.70 and 119.20.
On February 12, the rupee gained 40 paisa against dollar for buying and selling at 85.90 and 86.10. The rupee gained Rs 2.55 in relation to euro for buying and selling at Rs 116.15 and Rs 116.65.
On February 13, the rupee retained its overnight levels against dollar for buying and selling at 85.90 and 86.10. The rupee gained 20 paisa in relation to euro for buying and selling at Rs 115.95 and Rs 116.45.
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