Year-end payments toppled the currency rates in the interbank market last week, dragging the rupee down versus dollar which crossed an important mark of Rs 59.70, dealers said.
In the open market, the rupee shed two paisa versus dollar for buying at Rs 60.10 and slid five paisa for selling at Rs 60.20, dealers said.
The rupee followed suit in relation to euro, losing Rs 1.05 for buying and selling at Rs 71.80 and Rs 71.90, respectively.
The rupee shed two paisa in terms of the greenback in the interbank market for buying and selling at 59.89 and 59.91 on strong demand by the corporate sector, they said.
Market sources said that the rupee was under pressure due to year-end payments and rising demand of dollars by the Haj pilgrims. "We call it seasonal demand, and the rupee may be able to recover its lost ground versus dollar on increasing trend in remittances, which showed 4.61 percent rise in July-November period as the country received an amount of 1,683.96 million dollars," they said.
The noticeable thing was that higher oil prices in world markets pushed the import bills up, causing unusual increase in dollars' demand, they said. Additionally, near-term impact of the devastating earthquake on the overall economy of the country was also a negative factor, they added.
Delay in disbursement of funds or soft loan announced by the foreign countries was also a factor, which is causing dearth of dollars in the market, they said.
Besides, stronger position of the dollar in the international markets was another added factor behind dollars demand in the local market which hurt the rupee slightly, they said.
As a result of higher demand for dollars, the foreign exchange reserves came under pressure at the end of the year, falling to 11.320 billion dollars from 12.613 billion dollars in July.
They said that selling of export proceeds and rising remittances on the occasion of Eid-ul-Azha might provide some chance of resistance to the rupee, for the time being.
WORLD VALUE OF DOLLAR VS MAJOR CURRENCIES: The dollar pummelled by the news of a record of the US trade deficit, an upbeat Tankan survey in Japan and signs of a shift in the US monetary policy.
In the early sessions of the week, the yen slumped to a record low against the euro and slipped versus dollar as investors in Japan kept selling the low-yielding yen for currencies offering higher returns.
On Wednesday, on the back of continued increase in US interest rate by the Federal Reserve, the dollar revived and maintained a firm posture versus major currencies.
But since the Fed started signalling for the end of the rise, the dollar gave up its firmness versus most currencies.
At the week-end, the euro held steady against dollar and yen, drawing support after a closely-watched survey showed German business morale jumping to its highest level in nearly five and a half years.
The Ifo lifted euro/dollar a little bit but people had already been preparing for a strong number.
INTER-BANK MARKET: On Monday, the rupee-dollar official parity rates stuck in tight range in the interbank market, but somehow retained previous week-end levels for buying and selling at Rs 59.78 and Rs 59.79, respectively.
On Tuesday, importers' rush for dollars dragged the rupee down, which lost four paisa for buying and selling at Rs 59.82 and Rs 59.83, respectively.
On Wednesday, rupee failed to resist sharp erosion versus dollar, shedding three paisa for buying and selling Rs 59.85 and Rs 59.86, respectively.
Importers' dollar buying hit the rupee which lost seven paisa since the week started. There was dearth-like situation as the banks rushed for dollars to meet the demand.
On Thursday, the rupee lost two paisa for buying at Rs 59.87 and slid three paisa for selling at Rs 59.89.
On Friday, slight changes were seen as dollar supply was enough to meet the banks' requirements.
At the weekend, the rupee shed two paisa versus dollar for buying and selling at Rs 59.89 and Rs 59.91, respectively.
OPEN MARKET RATES: On December 12, the rupee shed three paisa against dollar for buying at Rs 60.08 and five paisa for selling at Rs 60.15 in increased demand for the US currency.
The rupee came under pressure versus euro, losing 25 paisa for buying and selling at Rs 70.75 and Rs 70.85, respectively.
The local currency suffered heavily versus euro as the single European currency surged and gained 50 paisa for buying and selling at Rs 71.25 and Rs 71.45, respectively.
On December 13, the rupee shed two paisa against dollar for buying at Rs 60.10 while it maintained its overnight level for selling at Rs 60.15, dealers at the forex market said, and added that they expected the rupee to slide on increased dollar buying by the corporate sector.
On December 14, the rupee continued its slide versus euro, losing 30 paisa for buying and selling at Rs 71.70 and Rs 71.80, respectively, they said.
The rupee firmed versus dollar for buying and selling at Rs 60.10 and Rs 60.15, respectively, dealers said.
On December 15, the rupee gained 10 paisa versus euro for buying and selling at Rs 71.60 and Rs 71.70, respectively.
The rupee remained firm versus dollar for buying and selling at Rs 60.10 and Rs 60.15, respectively, dealers said.
On December 16, the rupee did not show any change versus euro for buying and selling at Rs 71.60 and Rs 71.70.
The rupee remained firm versus dollar for buying at Rs 60.10 but shed five paisa for selling at Rs 60.20 on good buying, dealers said.
On December 17, the rupee was unmoved versus dollar, while it shed 20 paisa versus the single European currency for buying and selling at Rs 71.80 and Rs 71.90, dealers said.