Manages to recover

RECORDER REVIEW

KARACHI: An upward trend prevailed on the money market as the rupee improved with modest gains against the dollar and euro during the week, ended on March 28, 2015.

In the inter-bank market, the rupee picked up 10 paisas versus the dollar for buying and selling at Rs 101.88 and Rs 101.90.

In the open market, the rupee also rose by 40 paisas in terms of the dollar for buying and selling at Rs 102.00 and Rs 102.20. The rupee appreciated by 45 paisas against the euro for buying and selling at Rs 110.75 and Rs 111.00.

The rupee somehow managed to recover modestly against the dollar in the local currency market during the week, dealers said and adding that if the demand for dollars emerges following the ME crisis, this may now allow the rupee to maintain its firmness.

Commenting on the recovery of the rupee, some experts said that there are rising expectations that by the end of the year, the foreign exchange reserves may cross 18 billion dollars, a clear-cut indication of an increase in supply of dollars.

INTER-BANK MARKET RATES: On Monday: the markets were closed due to a local holiday on account of Pakistan Day. On Tuesday, the rupee was up by six paisas versus the dollar for buying and selling at Rs 101.99 and Rs 101.02.

On Wednesday, the rupee sustained its present levels versus the dollar for buying and selling at Rs 102.00 and Rs 102.04. On Thursday, the rupee almost held the overnight levels versus the dollar for buying and selling at Rs 102.00 and Rs 102.02. On Friday, the rupee picked up 12 paisas against the dollar for buying and selling at Rs 101.88 and Rs 101.90.

OPEN MARKET RATES: On March 24, the rupee maintained its overnight levels against the dollar for buying and selling at Rs 102.40 and Rs 102.60. The rupee lost Rs 1.55 in relation to the euro for buying and selling at Rs 111.80 and Rs 112.05.

On March 25, the rupee held the last levels against the dollar for buying and selling at Rs 102.40 and Rs 102.60. The rupee continued its fall in relation to the euro, shedding 20 paisas for buying and selling at Rs 112.00 and Rs 112.25.

On March 25, the rupee gained 20 paisas against the dollar for buying and selling at Rs 102.20 and Rs 102.40. The rupee also managed to recover 25 paisas in relation to the euro for buying and selling at Rs 111.75 and Rs 112.00.

On March 26, the rupee rose by 10 paisas against the dollar for buying and selling at Rs 102.10 and Rs 102.30. The rupee extended overnight gain in relation to the euro, gaining Rs 1.25 for buying and selling at Rs 110.50 and Rs 110.75.

On March 27, the rupee picked up 10 paisas against the dollar for buying and selling at Rs 102.00 and Rs 102.20. The rupee, however, shed 25 paisas against the euro for buying and selling at Rs 110.75 and Rs 111.00.

OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, the Australian and New Zealand dollars held hefty gains versus a broadly weaker US counterpart, while the kiwi scaled an all-time peak against its Australian neighbour.

The kiwi edged up to $0.7561, having jumped more than 2 percent on Friday to a peak of $0.7598, the highest since March 4.

The dollar was trading against the Indian rupee at Rs 62.29, the US currency was at 3.6835 in terms of the Malaysian ringgit and the greenback was at 6.2040 in terms of the Chinese yuan.

Inter-bank buy/sell rates for the taka against the dollar on Monday: 77.80-77.80 (previous 77.80-77.80).Call Money Rates: 07.50-8.00 percent (Previous 07.50-08.00 percent).

In the second Asian trade, the dollar dipped against the euro and yen on Tuesday, succumbing to downward pressure from lower US debt yields as investors remained jittery after last week’s surprisingly dovish Federal Reserve policy statement.

The greenback got little help overnight from comments by Federal Reserve officials, some of whom appeared to fall in line with the March 18, policy statement that suggested a less aggressive timetable for hiking interest rates.

The dollar was trading against the Indian rupee at Rs 62.20, the greenback was at 3.6700 in terms of the Malaysian ringgit and the US currency was at 6.2122 versus the Chinese yuan.

Inter-bank buy/sell rates for the taka against the dollar on Tuesday: 77.80-77.80 (previous 77.80-77.80). Call Money Rates: 07.50-8.00 percent (Previous 07.50-08.00 percent).

In the third Asian trade, the dollar hovered above a two-week low versus a basket of major currencies, pausing from the recent sell-off sparked by doubts over how soon the Federal Reserve may start raising interest rates.

Investors had rushed to cut long dollar positions after the Federal Reserve took a dovish tone on interest rates last week, sending the greenback crashing back from multi-year highs.

The dollar index last stood at 97.152. On Tuesday it had set a two-week low of 96.387, down roughly 4 percent from a near 12-year high of 100.39 struck in mid-March. The euro held steady near $1.0923, having backed off from Tuesday’s intraday high of $1.10295.

The greenback was available against the Indian rupee at Rs 62.29, the dollar was at 3.6600 in terms of the Malaysian ringgit and the US currency was at 6.2111 versus the Chinese yuan.

Inter-bank buy/sell rates for the taka against the dollar on Wednesday. 77.80-77.80 (previous 77.80-77.80).Call Money Rates: 07.50-8.00 percent (Previous 07.50-08.00 percent).

In the fourth Asian trade, the US dollar grounded lower in small ranges on Thursday, edging towards a four-week low against the yen in the wake of disappointing US data that suggested the greenback’s recent rally is on ice for now.

News that Saudi Arabia and its Gulf Arab allies had launched air strikes in Yemen also quelled risk sentiment and led to a surge in oil prices, though the forex market impact was muted. The strikes are aimed at Houthi fighters who have tightened their grip on the southern city of Aden. The US currency was available at Rs 62.63 versus the Indian rupee, the dollar was at 3.6750 versus the Malaysian ringgit and the greenback was trading at 6.2145 in relation to the Chinese yuan.

In the final Asian trade, the dollar held steady versus the yen on Friday but was on track for a second weekly loss after the US Federal Reserve’s dovish comments last week prompted traders to scale back bullish bets on the greenback.

The dollar last traded at 119.17 yen, little changed on the day. The dollar was down about 0.7 percent versus the yen for the week after falling 1.1 percent last week, when the Fed signalled a more cautious outlook for US economic growth.

The dollar was available against the Indian rupee at Rs 62.60, the greenback was at 3.6670 in terms of the Malaysian ringgit and the US currency was at 6.2134 versus the Chinese yuan.

At the week-end, the US dollar edged lower against a basket of major currencies after traders were reluctant to buy the greenback ahead of US jobs data next week, and after comments from Federal Reserve Chair Janet Yellen.

Yellen said the Fed is giving “serious consideration to” begin to reduce its accommodative monetary policy and a rate hike may be warranted later this year, although a downturn in core inflation or wage growth could force it to hold off.