Easy trend was seen in the currency market as the rupee drifted lower against dollar on account of higher demand by small investors after turmoil in the stock market during the week ended on August 25, 2007. In the interbank market, the rupee lost 15 paisa in relation to dollar for buying and selling at 60.66 and 60.68, respectively.
In the open market also the rupee lost 12 paisa to dollar for buying and selling at 60.85 and 60.92 and was sharply lower in relation to euro by nearly a rupee for buying and selling at Rs 82.73 and Rs 82.85.
According to money experts, the main reason of dollar's surge was sharp fall in share prices at local bourses, but now it looks that the rupee may improve next week as there are rising expectations that the equities may show betterment in their performance. It is also expected that the rising trend in the remittances may help the rupee to recover its lost ground versus the greenback, they said.
They observed that the political turmoil pushed the share prices sharply lower, and causing it surge in the dollar's demand in the local market.
INTER-BANK MARKET RATES: On Monday, the rupee lost three paisa in relation to dollar for buying at 60.51 and selling at 60.53, dealers said.
On Tuesday, the rupee failed lost 3 paisa against dollar for buying and selling at 60.54 and 60.56, they said. On Wednesday, the rupee lost 6 paisa against dollar for buying at 60.60 and 5 paisa for selling at 60.61, dealers said.
On Thursday, the rupee maintained its overnight levels for buying at 60.60 and selling at 60.61, dealers said.
The Friday, the rupee lost 7 paisa against the dollar for buying and selling at 60.67 and 60.69. On Saturday, the rupee gained one paisa against dollar for buying and selling at 60.66 and 60.68, dealers said.
WORLD MARKET SCENARIO: In the first session of the week, the yen edged up against the dollar as Japanese exporters rushed to hedge, but most investors waited to see if the Federal Reserve's emergency action to lower discount rates would help settle nerves over the credit sector.
The yen fell on Friday from a 14-month peak against the dollar after the Fed's unexpected decision to cut the interest rate charged on direct Fed loans to banks helped restore some confidence in the US share market.
During the second session, the US currency rose during the second session, encouraged by the calm on global stock markets. The dollar was trading at 114.90 yen, up from 114.86 yen late Monday in New York, as regional share prices edged up for the second straight day, recovering from the plunge that battered Asian stock markets last week.
In the third session, the dollar hardly moved against the yen in Asian trade on Wednesday as market players took a breather after recent turbulence over the troubled US housing sector, traders said. During the forth session, the yen extended a slide against the dollar and higher-yielding currencies on Thursday as gains in US equities soothed worries of further risk aversion and unwinding of carry trades.
OPEN MARKET RATES: On August 20, the rupee gained two paisa in terms of dollar for buying and selling at 60.75 and 60.80, dealers said.
It picked up 17 paisa in relation to euro for buying and selling at Rs 81.72 and Rs 81.82, they said. On August 21, the rupee losing 2 paisa against dollar for buying at 60.77 and 5 paisa for selling at 60.75, dealers said.
The rupee, however, picked up 12 paisa against euro for buying and selling at Rs 81.60 and Rs 81.70, they said.
On August 23, the rupee lost 10 paisa in relation to dollar for buying at 60.85 and 12 paisa for selling at 60.95, dealers said. The rupee also slid steeply versus the euro, losing 43 paisa for buying and selling at Rs 82.03 and Rs 82.15, they said.
On August 24, the rupee did not show any change for buying at 60.85 while it gained three paisa for selling at 60.92 in process of trading, dealers said.
The rupee, however, lost 12 paisa in relation to euro for buying and selling at Rs 82.15 and Rs 82.25, they said. On August, 25, the rupee did not show any change in terms of dollar for buying at 60.85 while it managed to pick up two paisa at 60.90, dealers said. The rupee, however, lost 58 paisa against euro for buying and selling at Rs 82.73 and Rs 82.85, they said.