THE RUPEE: stable trend

The rupee maintained a firm posture against the dollar on the money market during the shortened week owing to Eid-ul-Fitr holidays, ended on July 01, 2017. The rupee managed to keep present levels in relation to the dollar for buying and selling at Rs 105.80 and Rs 106.00, they said. The rupee held it's last levels in relation to the euro for buying and selling at Rs 120.00 and Rs 121.00.
OPEN MARKET RATES: INTER-BANK MARKET RATES: the rupee moved in a tight range versus the dollar for buying and selling at Rs 104.86 and Rs 104.88. Commenting on the stable trend in the market, some analysts said that country's foreign exchange reserves improved last week, which eased the supply of dollars. So, it appeared that the rupee is likely to move in a tight range in terms of the dollar, they said.
INTER-BANK MARKET RATES: The rupee gained slightly versus the dollar for buying and selling buying and selling at Rs 104.86 and Rs 104.88.
OPEN MARKET RATES: On Thursday, the rupee recovered 10 paisas in relation to the dollar for buying and selling at Rs 105.80 and Rs 106.00, they said. The rupee fell sharply in terms of the euro, losing Rs 1.80 for buying and selling at Rs 119.80 and Rs 120.80.
On Friday, the rupee stayed put versus the dollar for buying and selling at Rs 105.80 and Rs 106.00, they said. The rupee shed 20 paisas in terms of the euro for buying and selling at Rs 119.80 and Rs 120.80. On Saturday, the rupee did not move any side against the dollar for buying and selling at Rs 105.80 and Rs 106.00, they said. The rupee fell sharply in terms of the euro, losing Rs 1.80 for buying and selling at Rs 119.80 and Rs 120.80.
INTER-BANK MARKET RATES: On June 29, the rupee shed two paisas in relation to the dollar for buying and selling buying and selling at Rs 104.89 and Rs 104.90. On June 30, the rupee picked up two paisas versus the dollar for buying and selling at Rs 104.86 and Rs 104.88.
OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian session, the dollar sagged against its major peers, losing traction as US Treasury yields stayed low amid fading expectations that the Federal Reserve to hike interest rates again later this year. The dollar index against a basket of six major currencies was a fraction lower at 97.239, adding to Friday's losses when it fell 0.4 percent.
The index had climbed to a one-month peak of 97.871 earlier last week, supported by expectations that the Fed, fresh from a mid-June rate hike, would tighten policy again as early as September. But such expectations ebbed over the course of a week, with investors doubtful of another rate increase this year as US data on balance have fallen short of forecasts.
"The main reason behind the weakness of the dollar, which has lost its upward momentum since the Fed rate hike, is US yields stuck at low altitude," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo. "Yields appear to better reflect US fundamentals relative to equities, and in focus this week are political developments and the various indicators due for release." US data due next week include the June consumer confidence indicator, pending home sales, crude oil inventories, revised first quarter GDP and the PCE price index.
In the second Asian session, the dollar rose on Tuesday to its highest level against the yen in nearly five weeks ahead of comments from Federal Reserve Chair Janet Yellen that are expected to underline her positive view of the US economic outlook. She is scheduled to take part in a discussion later on Tuesday at London's Royal Academy. A positive view despite a recent batch of weak US economic data would support the Fed's forecast for another rise in policy rates this year.
"Hedge funds are already selling yen this week, and positive comments from Yellen could give them an excuse to sell even more," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo. The dollar rose to 112.075 yen earlier on Tuesday, its highest level since May 24. It was last at 111.88 yen, up slightly on the day. US data on Monday gave investors reason to be cautious about buying the dollar. New orders for key US-made capital goods unexpectedly fell in May and shipments also declined, suggesting a loss of momentum in the manufacturing sector halfway through the second quarter.
In the third Asian trade, the euro hit a 10-month high on Wednesday after the European Central Bank chief hinted the days of the ECB's aggressive stimulus are numbered, and as the dollar was pressured after a vote on US healthcare legislation was delayed. The euro edged up 0.1 percent to $1.1345, having hit a high of around $1.1355 earlier on Wednesday, its strongest level since August 2016. The common currency has gained 1.4 percent this week.
The euro's rally came after ECB President Mario Draghi said at a conference in Portugal on Tuesday that deflationary forces had been replaced by reflationary ones. But any change in the ECB's stance should be gradual as "considerable" monetary support is still needed and the rebound in inflation will also depend on favourable global financing conditions, he added.
In the fourth Asian session, the dollar wallowed at one-year lows against the euro and slipped against sterling as investors priced in tighter monetary policy in Europe. The dollar index, which tracks the greenback against a basket of six major rival currencies, was down 0.1 percent at 95.843, plumbing its lowest levels since October and well below highs above 97.0 hit earlier this week.
Sterling added to gains made after Bank of England Governor Mark Carney said on Wednesday that the central bank is likely to need to raise interest rates as the British economy comes closer to operating at full capacity. European Central Bank President Mario Draghi sparked the euro's rally on Tuesday, when he hinted that the ECB could trim its stimulus this year.
The Federal Reserve hiked interest rates this month and left the door open for further increases later in the year, though a batch of mixed economic data recently has had investors wondering whether the Fed would be able to stay on its planned tightening path.
The dollar was trading against the Indian rupee at Rs 64.460, the US currency was at 4.294 in terms of the Malaysian ringgit and the greenback was at 6.779 versus the Chinese yuan. Inter bank buy/sell rates for the taka against the dollar on Thursday: 80.59-80.60 (previous 80.58-80.60).
The dollar languished near a nine-month low against a basket of currencies on Friday, bogged down by growing expectations of more hawkish monetary policies in Europe and Canada and doubts about another US interest rate increase this year. The dollar index, which measures the greenback against a basket of six major currencies, last stood at 95.598. That was near a low of around 95.53 touched this week, its lowest level since early October 2016.
The euro eased 0.1 percent to $1.1430, backing away slightly from a peak of $1.1445 set this week, the common currency's strongest level in almost 14 months. The euro has risen rapidly following Tuesday's speech by European Central Bank President Mario Draghi that convinced markets the ECB was preparing to start reducing its aggressive monetary stimulus later this year.
In addition, comments from Bank of England Governor Mark Carney and two top Bank of Canada policymakers on Wednesday ramped up expectations for interest rate increases from those central banks. "Obviously there's a shift afoot. It really seems that there's some coordinated effort going on out here among the G10 central banks," said Stephen Innes, head of trading in Asia-Pacific for OANDA in Singapore, referring to the series of hawkish-sounding comments on monetary policy.
The dollar was trading against the Indian rupee at Rs 64.680, the greenback was at 4.292 in terms of the Malaysian ringgit and the US currency was at 6.768 versus the Chinese yuan. In the final Asian session, the dollar languished near a nine-month low against a basket of currencies, bogged down by growing expectations of more hawkish monetary policies in Europe and Canada and doubts about another US interest rate increase this year.
The dollar index, which measures the greenback against a basket of six major currencies, last stood at 95.598. That was near a low of around 95.53 touched this week, its lowest level since early October 2016. The euro eased 0.1 percent to $1.1430, backing away slightly from a peak of $1.1445 set this week, the common currency's strongest level in almost 14 months.
The euro has risen rapidly following Tuesday's speech by European Central Bank President Mario Draghi that convinced markets the ECB was preparing to start reducing its aggressive monetary stimulus later this year. In addition, comments from Bank of England Governor Mark Carney and two top Bank of Canada policymakers on Wednesday ramped up expectations for interest rate increases from those central banks.
The dollar was trading against the Indian rupee at Rs 64.680, the greenback was at 4.292 in terms of the Malaysian ringgit and the US currency was at 6.768 versus the Chinese yuan. The US dollar recovered slightly on Friday, but posted its biggest quarterly decline against a basket of rival currencies in nearly seven years after hawkish signals from foreign central banks this week pressured the greenback further. Investors have ramped-up expectations for tighter monetary policy from the European Central Bank, Bank of England and Bank of Canada after hints from officials this week.
This has made the greenback less attractive, in addition to skepticism that the Federal Reserve would be able to raise interest rates again this year given a recent batch of weak US economic data and doubts that US President Donald Trump could enact his pro-growth agenda.
The US dollar index, which measures the greenback against a basket of six major currencies, declined about 4.6 percent for the second quarter to mark its steepest quarterly percentage drop since the third quarter of 2010. The euro accelerated more than 7 percent against the greenback for its biggest quarterly percentage gain since the third quarter of 2010. The euro racked up about 2 percent of its gains and the dollar index posted about 1.6 percent of its losses this week alone. The dollar gained about 1 percent against the Japanese yen over the quarter.