The rupee resisted steep fall in relation to the dollar, however, it showed sharp erosion versus the euro during the week, ended on 4-4-2009. On the interbank market, the rupee shed 5 paisa in terms of the US currency for buying and selling at 80.55 and 80.60 due to easy supply of dollars.
The rupee rose by 5 paisa versus the greenback for buying at 80.40 while it lost 20 paisa for selling at 80.80. Versus the euro, it fell steeply losing Rs 2.50 to Rs 109.00 and 110.00.
In fact, range-bound trading was witnessed on the currency market mainly because of the expectations for returning of political stability in the country and partly because of little improvement in inflows helped the rupee to stabilise in the starting session of the week. The major factor, which could revive trade activity in the country is building of confidence not only circulation of money. Investment-friendly measures are required to bring political and economic stability, which will definitely discourage the dollarisation at home and strengthen the rupee, as well.
INTER-BANK RATES: On Monday, the rupee retained its overnight level against the dollar for buying and selling at 80.50 and 80.55. On Tuesday, the rupee firmly held its level against the dollar for buying and selling at 80.50 and 80.55.
On Wednesday, the rupee drifted lower, losing 8 paisa for buying at 80.58 and also falling 7 paisa for selling at 80.62. On Thursday, the rupee recovered 8 paisa against the dollar for buying at 80.50 and it also gain 2 paisa for selling at 80.60. On Friday, the rupee was intact versus the dollar for buying at 80.50 while it gained 5 paisa for selling at 80.55. On Saturday, the rupee shed 5 paisa against the dollar for buying and selling at 80.55 and 80.60.
OVERSEAS OUTLOOK FOR DOLLAR: In the beginning session of the week, the yen rose sharply after a US government task force rejected the turnaround plans of General Motors Corp and Chrysler LLC, sparking investor risk aversion and sending the euro and dollar down 1 percent. During the second session, the yen slid broadly on a surge in Japanese investors demand for foreign currencies on the last day of Japans financial year. The dollar gained against the yen but retreated against other peers as safe haven bids eased for the time being.
The yen and the dollar, used as safe havens during times of financial market turmoil, were boosted the previous day as fears of bankruptcy for US automakers General Motors and Chrysler sparked a sharp drop in global stock markets.
Amid third session, the yen surged broadly after a report that President Barack Obama was prepared to let carmaker Chrysler go bankrupt, stirring risk aversion in the market and helping the yen to reverse losses against the dollar and the euro. Amid fourth session, the yen fell, losing ground to higher-yielding currencies as stock markets rose on hopes a deep recession is moderating, but ranges were tight as the market awaited a European Central Bank policy decision.
At the final session of the week, the yen and the dollar trimmed losses after hitting multi-month lows on renewed risk appetite, as caution set in ahead of US employment figures due later in the day. Group of twenty, G-20 leaders clinched a $1.1 trillion deal on Thursday to counter the world wide economic crisis and the United States said it would change accounting rules to allow banks more flexibility in valuing toxic assets.
In the New York market, the US dollar rose against the yen after US jobs data was as bad as many had feared and did little to dampen investors improved appetite for risk.
The euro also edged higher, extending gains it made in the previous session after the European Central Bank cut interest rates less than expected and declined to be specific about a more aggressive stance to boost growth.
For the next week, the US dollar is likely to gain as a jump in the US unemployment rate to its highest since 1983 prompts investors to again seek the relative safety of the greenback. While other US data earlier in the week, including a survey on the US manufacturing sector and separately, home sales, eased concerns about the US economy, the rise in the unemployment rate to 8.5 percent in March from 8.1 percent the prior month eroded any optimism about economic stability.
OPEN MARKET RATES: On March 30, the rupee shed 5 paisa against the dollar for buying at 80.45, it, however, lost 10 paisa for selling at 80.60, they said.
While, the rupee did not show any change in terms of the euro for buying and selling at Rs 106.50 and Rs 107.50. On March 31, the rupee maintained the overnight levels against the dollar for buying and selling at 80.45 and 80.60. While, the rupee gained 50 paisa against the euro for buying and selling at Rs 106.00 and Rs 107.00. On April 1, the rupee gained 5 paisa against the dollar for buying at 80.40 while it was unmoved for selling at 80.60. While, the rupee maintained its riding over the euro, gaining 50 paisa for buying and selling at Rs 105.50 and Rs 106.50.
On April 2, the rupee maintained its overnight level against the dollar for buying at 80.40 while it shed 10 paisa for selling at 80.70. While, the rupee tumbled versus the single European currency, losing 70 paisa for buying and selling at Rs 106.20 and Rs 107.20.
On April 3, the rupee shed 5 paisa against the dollar for buying at 80.45 while it rose by 10 paisa for selling at 80.60. The rupee continued its weakness versus the euro, falling Rs 1.05 for buying and selling at Rs 107.25 and Rs 108.25. On April 4, the rupee gained 5 paisa against the dollar for buying at 80.40, it, however, lost 20 for selling at 80.80. The rupee expanded its losing ground versus the euro, falling Rs 1.75 for buying and continued its weakness versus the euro, falling Rs 1.05 for buying and selling at Rs 109.00 and Rs 110.00.