The rupee breached the barrier of 84 against the dollar on the currency market as the State Bank of Pakistan (SBP) shifted entire load of oil payments to the commercial banks. The rupee during the week ended on December 12, 2009 dropped sharply on the interbank market, losing 43 paisa versus the dollar for buying at 84.10 and 45 paisa for selling at 84.15.
In sympathy with the interbank, the rupee, on the open market, also shed 80 paisa for buying and selling at 84.40 and 84.50, in the meantime, it gained sharply by Rs 2.40 in relation to the euro for buying and selling at Rs 122.25 and Rs 122.75.
It appeared that the rupee fell sharply against the dollar in both the open and interbank market, after the State Bank of Pakistan (SBP)'s decision that the private sector or commercial banks to pay oil payment for import bills from December 14, 2009 instead of February 2010.
Persisting demand for forward buying of dollar is indicating that the rupee may show further weakness in the coming days.
INTER-BANK MARKET RATES: On Monday, the rupee dropped 45 paisa versus the dollar for buying at 84.12 and 48 paisa for selling at 84.18.
On Tuesday, the rupee shed three paisa versus dollar for buying at 84.15 and two paisa for selling at 84.20. In the meantime, exports may depict improvement in the coming days as the dollar is rising and nobody is available to guess about the new highs. On Wednesday, the rupee shed five paisa against dollar for buying and selling at 84.20 and 84.25.
On Thursday, the rupee did not show any change versus dollar for buying and selling at 84.20 and 84.25. On Friday, the rupee managed to recover 15 paisa against dollar for buying and selling at 84.05 and 84.10 in process of trading.
On Saturday, the rupee dropped five paisa for buying and selling at 84.10 and 84.15 on strong demand of the US currency.
OVERSEAS VALUE OF DOLLAR: In the first Asian trading, the dollar slipped against the yen as traders pocketed profits, slipping from a one-month peak hit late last week when a surprisingly low number of US job losses boosted hopes for an economic recovery.
In the second Asian trade, the dollar fell and the yen rose after senior Federal Reserve officials curbed speculation of a quick rise in US rates that had sent the greenback smartly higher after a promising jobs report last week.
In the Third Asian trade, the euro fell to a one-month low against the dollar as investors unwound positions in riskier assets ahead of the year-end, prompted in part by rising debt woes for Greece and Dubai. Worries about Britain's fiscal health continued to pressure sterling, which slid to an eight-week low against the dollar. In the fourth Asian trade, the dollar moved little versus the yen and euro, the yen's strength remains the market's biggest concern for now," Tachibana Securities market analyst Kenichi Hirano told Dow Jones Newswires on Thursday.
The dollar was at 87.86 yen in late Tokyo trade. Last month it hit a 14-year trough below 85 yen, hitting struggling manufacturers, many of which rely heavily on overseas markets. In the final session, the dollar held steady while the yen lost ground on Friday, dented by firmer stock markets and a rise in sterling after Moody's analysts said there was no threat to ratings of the UK and United States at the moment. Traders said investors were looking for opportunities to liquidate long yen positions as business winds down for the year and once widely-watched Chinese data had come in as expected, supporting Asian share markets, position closing set in.
At the week-end, the dollar rose to a two-month high against the euro on after surprisingly strong data on US consumers boosted expectations the Federal Reserve would raise interest rates sooner rather than later.
OPEN MARKET RATES: On December 7, the rupee drifted lower in terms of dollar, losing 15 paisa for buying and selling at 83.75 and 83.85. The rupee, however, gained Rs 2.15 against euro for buying and selling Rs 122.50 and Rs 123.00. On December 8, the rupee also crossed the barrier of 84 in the open market, falling 15 paisa for buying and selling at 83.90 and 84.00. The rupee, however, gave up its overnight firmness in relation to the euro, losing 90 paisa for buying and selling Rs 123.40 and Rs 123.90.
On December 9, the rupee retained its overnight level against dollar for buying and selling at 83.90 and 84.00. While, the rupee recovered 65 paisa in relation to the euro for buying and selling Rs 122.75 and Rs 123.25. On December 10, the rupee lost 30 paisa against the dollar for buying and selling at 840.20 and 84.30. The rupee, however, gained 65 paisa in relation to the euro for buying and selling at Rs 122.10 and Rs 122.60. On December 11, the rupee, however, lost 20 paisa versus the dollar for buying and selling at 84.40 and 84.50. The rupee reacted negative versus the euro, falling Rs 1.80 for buying at Rs 123.70 and it also shed Rs 1.60 for selling at Rs 124.20.
On December 12, the rupee was unchanged versus the dollar for buying and selling at 84.40 and 84.50. While, the rupee gained sharply against the euro for buying and selling at Rs 122.25 and Rs 122.75.