IN the local currency market this week, the rupee avoided sharp rise against the dollar, though it continued its downslide versus US currency amid rising demand to cover yearend payments.

The rupee commenced the week on bearish tone moving both ways as it continued to drift lower versus dollar, off set to a greater extent by increased inflows of overseas remittances. In the inter-bank market, the rupee lost 14 paisa on the buying counter and another 13 paisa in the selling counter to trade at Rs85.44 and Rs85.48 in the first trading session after closing last week at Rs85.30 and Rs85.35.

However on June 29, the rupee managed to stage rebound versus dollar, reversing the overnight weakness. It recovered 9 paisa on the buying counter and 6 paisa on the selling counter closing the second day trading session at Rs85.35 and Rs85.42. The recovery against the dollar proved short lived as the rupee posted fresh losses against the dollar in the third trading session, losing 13 paisa on the buying counter and 10 paisa on the selling counter to close the fiscal 2009-10 at Rs85.48 and Rs85.52 on June 30.

There was no trading in the inter-bank market as all banks were closed for public dealing throughout the country due to Bank Holiday on July 1. When trading resumed in the inter-bank market after one day break, the rupee was seen firming up versus dollar, gaining 10 paisa to close the week on June 2 at Rs85.38 and Rs85.42. On week over week basis, the rupee in the inter-bank market this week lost eight paisa against the dollar.

In the open market, the rupee continued its declining trend versus dollar this week. However, it managed to resist sharp declines despite rising dollar demand. On the opening day of the week, it showed mixed sen timents as it stayed unchanged against the dollar on the buying counter, trading at its previous weekend level, while it drifted lower by five paisa on the selling counter. At the close of the first day trading, the dollar was changing hands at Rs85.30 and Rs85.50 against previous week close of Rs85.30 and Rs85.45. On June 29, the rupee further shed 5 paisa against the dollar on the buying counter but remained unchanged at its overnight level on the selling counter, trading at Rs85.35 and Rs85.50.

The rupee/dollar parity continued its falling trend in the third and fourth trading sessions. The rupee traded at Rs85.40 and Rs85.55 versus dollar after shedding five paisa on June 30. It further drifted lower by five paisa on July 1 to trade against the dollar at Rs85.45 and Rs85.60. Finally the week ended on a stable note as it traded against the dollar unchanged at Rs85.45 and Rs85.60 on June 2. During the week in review, the rupee in the open market lost 15 paisa against the dollar on the buying counter and another 10 paisa on the selling counter. In the fiscal year 2009-10, the rupee has depreciated by 4.7 per cent. The dollar was at Rs81.35 and Rs81.65 on June 30, 2009.

Versus the European single common currency, the rupee assumed a fluctuating trend this week after opening at negative note on June 28 when it slipped by Rs1.05, changing hands at Rs105.00 and Rs105.50. The euro had ended last week at Rs103.95 and Rs104.45. The rupee, however, managed to recover from its overnight losses in the second trading session, picking up Rs1.70 to trade at Rs103.30 and Rs103.80 on June 29 but then it again drifted lower in the third trading session, losing 15 paisa to close the day at Rs103.45 and Rs103.95 on June 30.

On July 1, the rupee continued its falling trend versus euro. It posted fresh decline of 75 paisa, changing hands against the euro at Rs104.20 and Rs104.70. The rupee continued its down slide versus euro in the last trading session, posting fresh losses to the tune of 180 paisa to close the week at Rs106.00 and Rs106.50 on July 2. This brings cumulative loss in rupee value in relation to euro this week to Rs3.05. On year on year basis, the rupee at the close of FY 2009-10 has appreciated by 9.8 per cent against the European single common currency. Euro was at 113.56 and Rs114.56 on June 30 last year. However, the rupee in the past 12 months had hit record lows at Rs123.36 on January 13, 2010.

On the international front, the euro fell on the week's opening day. In New York, the euro slid 0.8 percent to $1.2275, near a session low of $1.2265 hit on electronic trading platform EBS and well off an intraday peak of $1.2398. Against the yen, the dollar was up 0.2 per cent at 89.42 yen, after hitting a fiveweek low of 89.06. Sterling, which gained nearly one per cent last week close, edged down 0.1 per cent to $1.5050. On June 29, the euro fell 0.7 to $1.2190 after hitting a two-week low of $1.2152. Against the yen, the dollar dropped 0.9 to 88.54. Sterling was down 0.2 per cent at $1.5070 after hitting a seven-week high of $1.5130 a day earlier.

On June 30, the euro hit a session high of $1.2304, rebounding from a twoweek low hit on the previous day. It last traded at $1.2228, up 0.4 per cent. Against the yen, the dollar fell 0.1 per cent to 88.44. In London, sterling retreated from a rally to $1.5130 earlier in the week, its strongest in nearly two months, pushing the pound below key technical support at $1.5025. The pound has climbed roughly three per cent so far this month, its best monthly performance since May 2009.
On July 1, the euro advanced 2.4 per cent to $1.2521, with the high at $1.2541 on electronic trading platform EBS. Against the yen, the dollar slid below 87 yen, down 0.9 per cent at 87.64 yen after going as low as 86.96, its weakest in seven months.

Sterling jumped to an eight-week high recouping losses on the back of a broadly softer dollar. Weak jobs, housing and manufacturing sector data slammed the dollar, pushing the pound up 1.2 per cent to $1.5144. Gains accelerated after stop-losses were triggered above $1.5000.

At the close of the week on July 2, the dollar slipped against the euro. In early New York trade, the euro last traded at $1.2591, up 0.6 percent on the day. The single currency rose as high as $1.2613 the first time over the 1.2600 level since May 21. For the week, the euro gained 1.8 per cent against the dollar, reversing a loss from the previous week. The dollar was last at 87.77 yen, up 0.2 per cent for the day. In London, sterling hit a twomonth high against the dollar. It climbed to $1.5230, its strongest since early May before trimming gains to trade up just a touch on the day at $1.5191.