The rupee moved both ways on the currency market during the week ended on September 13, 2008. In the interbank market, the rupee stayed put against dollar for buying at 76.45 and shed five paisa for selling at 76.55.
In the open market, the rupee fell by 40 paisa versus dollar for buying and selling at 76.50 and 76.80, but managed to gain 60 paisa against euro for buying and selling at Rs 108.50 and Rs 108.70.
The weak economic fundamentals and continued jitters among investors shattered the nerves of both local and foreign investors, additionally causing main hurdle in the way of inflows. Instead, these paved the way for outflows. Despite the fact that officials of past and present governments claimed that they were providing fastest and latest technologies to bring the country out of crisis but unfortunately the outcome of any effort could not be seen.
INTER-BANK RATES: On Monday, the rupee fell by 10 paisa against dollar for buying at 76.45 and 15 paisa for selling at 76.55. On Tuesday, the rupee lost five paisa for buying against dollar at 76.50 while it did not move to any side for selling at 76.55.
On Wednesday, the rupee shed five paisa against dollar for buying and selling at 76.55 and 76.60. On Thursday, the rupee dropped five paisa for buying and selling at 76.60 and 76.65. On Friday, the rupee gained 10 paisa versus dollar for buying and selling at 76.50 and 76.55.
On Saturday, the rupee gained five paisa versus dollar for buying and selling at 76.45 and 76.50.
OVERSEAS OUTLOOK FOR DOLLAR: In the beginning session of the week, the dollar fell against euro but climbed on a sliding yen after the US government seized control of mortgage companies, Fannie Mae and Freddie Mac, to shore up the US housing market and to prevent the spread of global financial turbulence.
During the second session, the dollar rose to a one-year peak against a basket of currencies, pushed higher by falls in the euro and the Australian dollar as the yen surged on a renewed flight to safety.
In the third day trading, the dollar gained ground in Asian trade on speculation that investment bank Goldman Sachs may make a last-minute deal to take over troubled Lehman Brothers, dealers said. During the fourth session, the dollar moved both ways in process of trading. During the fifth Asian trading, the yen held steady near a two-year high against the euro and stayed firm against other major currencies as investors awaited more news about Lehman Brothers ahead of a long weekend in Japan.
In the New York market, the US dollar fell as uncertainty over the future of troubled investment bank Lehman Brothers and data showing a second straight month of declines in retail sales triggered profit-taking.
Worries about Washington Mutual Inc, after the largest US savings and loan institution projected further write-downs, also added to selling pressure on the dollar. Troubles at Lehman have revived worries about the US financial sector and analysts say any developments on the bank’s future could dictate the dollar’s direction. Lehman shares tumbled to a near-14-year low on Friday as traders speculated about a possible deal on the bank over the weekend.
“Broadly speaking, the key factor governing currency trade in the short term is going to be the swings in risk appetite,” said Todd Elmer, a currency strategist at Citigroup in New York.
OPEN MARKET RATES: On September 8, the rupee traded at 76.10 and 76.40. The rupee dropped sharply against euro, losing Rs 1.15 for buying and selling at Rs 109.10 and Rs 109.30.
On September 9, the rupee shed 10 paisa against the dollar for buying and selling at 76.20 and 76.50, dealers said. The rupee fell sharply against the euro, falling Rs 2.30 for buying and selling at Rs 106.85 and 107.00, they said.
On September 10, the rupee was down versus the dollar in the open market as it shed 10 paisa for buying at 76.30 and it lost 20 paisa for selling at 76.70. The rupee also shed 55 paisa against the euro for buying at Rs 107.40 and it fell by 50 paisa for selling at Rs 107.50.
On September 11, the rupee lost 20 paisa in relation to the dollar for buying and selling at 76.50 and 76.80. The rupee, however, managed to gain versus the euro, picking up Rs 1.05 for buying and selling at Rs s 106.35 and 106.50, respectively.
On September 12, the rupee fell against the dollar, slipping 20 paisa in terms of the dollar for buying and selling at 76.70 and 77.00. The rupee also came under pressure against the euro, dropping 55 paisa for buying at 106.90 and it also lost 70 paisa for selling at Rs 107.05. On September 13, the rupee rose by 20 paisa in relation to the dollar for buying and selling at 76.50 and 76.80.
The rupee also appreciated in terms of the euro, picking Rs 1.60 for buying at Rs 108.50 and it also gained Rs 1.75 for selling at Rs 108.70.
Source: Business Recorder, 15/9/2008