The rupee showed slight weakness against dollar in the currency market last week ended on March 23, dealers said. In the interbank market, the rupee fluctuated within a band and ended on a firm note at 60.69 and 60.70 for a dollar for buying and selling, respectively.
In the open market, the rupee shed five paisa against dollar for buying and selling at 60.70 and 60.80, they said. The feature of the week was euro's sharp gain versus rupee, which broke the barrier of Rs 81 after sharp rise in the world markets, they said.
In the early sessions of the week, the rupee fell sharply in terms of euro after hitting the new low at Rs 81, but trimmed some losses at Rs 80.48 and 80.58 as the dollar recovered following the jump in the US home sales, dealers said.
According to market source, at the end of the third quarter of the current fiscal year, increased buying for dollars was witnessed by importers to meet their payment requirements.
In the meantime, supply of dollars was good which did not force the rupee to look downward, and it was being expected that supply of dollars might improve as investment had doubled during the eight months of the fiscal year, money experts said.
The country's foreign exchange reserves have gone up to 13,506.5 million dollars, giving a boost to the rupee to hold its firmness against dollar, they added.
In the long-term, some money analysts said, the rupee might not be able to maintain its firmness and was likely to lose some lustre due to rising demand for dollars by importers for higher payment bills.
INTER-BANK RATES: On Monday, bullish sentiment was seen as the rupee extended its weekend gains against dollar, picking up four paisa for buying and selling at 60.69 and 60.71, dealers said.
On Tuesday, the rupee maintained its overnight levels against dollar for buying and selling at 60.69 and 60.71, dealers said.
On Wednesday, the rupee more or less held its overnight levels against dollar for buying and selling at 60.68 and 60.70, respectively.
Easy supply of dollars helped the rupee to keep its firmness, despite strong demand by banks, they said.
On Thursday, the rupee shed two paisa against dollar for buying and selling at 60.71 and 60.72, dealers said.
On Friday, commercial rates and rupee-dollar parity rates were not issued as the banks were closed due to Pakistan Day holiday.
On Saturday, the rupee shrugged off vulnerability, gaining two paisa against dollar for buying and selling at 60.69 and 60.70, dealers said.
WORLD MARKET SCENARIO: In the beginning of the week, the yen fell against other major currencies on Monday, giving up earlier gains made in the wake of China's rate hike as a rebound in the Nikkei share average eased fears about investors further cutting back on riskier assets. On Tuesday, the dollar recovered against most of the currencies.
On Wednesday, the dollar steadied, after falling on a report China would stop stockpiling foreign exchange reserves, while traders were cautious ahead of a Federal Reserve policy-meeting statement.
More analysts were also taking the view that the dollar's decline was unwarranted and that People's Bank of China Governor Zhou Xiaochuan's comment about China's $1 trillion stash of reserves had been incorrectly interpreted by the market.
On Thursday, the dollar failed to hold its present level as the Federal Reserve held interest rates steady and dropped a reference in its post-policy meeting statement to possible further rate hikes.
Although the Fed said after its Federal Open Market Committee meeting that inflation was still its main concern, investors took the change in the statement as a sign that a rate cut may be near.
"It seems the FOMC is signalling that growth may slow enough to address inflationary pressures," said currency strategists at Morgan Stanley.
On Friday, the dollar steadied against the euro and yen, retaining gains made the previous session on views that the Federal Reserve may keep interest rates on hold for some time.
The Fed left the funds rate unchanged at 5.25 percent on Wednesday but eliminated a reference to possible further rate hikes in its post-meeting statement.
At the weekend, the dollar firmed against euro, following a surprise jump in the US existing-home sales tempered the case for lower benchmark interest rates by the middle of the year.
It also pared losses against the yen sustained overnight when data showed the first annual rise in Japanese land prices in 16 years.
OPEN MARKET RATES: On March 19, the rupee maintained a firm posture against dollar for buying and selling at 60.70 and 60.80, dealers said.
The rupee resisted further decline against euro for buying and selling at Rs 80.48 and Rs 80.58, they said.
On March 20, the rupee maintained a firm posture against dollar for buying and selling at 60.70 and 60.80, dealers said.
The rupee recovered 10 paisa against euro for buying and selling at Rs 80.38 and Rs 80.48, they said.
On March 21, the rupee shed five paisa for buying and selling at 60.75 and 60.85, dealers said.
The rupee lost 15 paisa for buying and selling at Rs 80.53 and Rs 80.63, dealers said.
On March 22 the euro gained 47 paisa in a single day rally for buying and selling at Rs 81.00 and Rs 81.10, they said. The rupee shed five paisa in relation to dollar for buying and selling at 60.80 and 60.90, they said.
On March 23, rupee-dollar parity rates were unchanged, they said. On march 24, the rupee gained five paisa against dollar for buying and selling at 60.75 and 60.85 as supply was smooth to meet the importers' demand, they said.
The rupee also recovered 64 paisa gain in relation to euro for buying and selling at Rs 80.36 and Rs 80.46, they said.