THE RUPEE: Two-way trade

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SOURCEBusiness Recorder
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KARACHI: The rupee showed mixed trend against the dollar on the local currency market during the ended on Nov 23, 2019.

INTER-BANK MARKET RATES: The rupee gained six paisas against the dollar for buying and selling at Rs 155.28 and Rs 155.32 respectively, they said.

OPEN MARKET RATES: The rupee depreciated by 10 paisas against the dollar for buying and selling at Rs 155.30 while it lost 20 paisas for selling at Rs 155.60, they said. The rupee was almost unchanged in relation to the euro for buying and selling at Rs 171.00 and Rs 172.50.

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Marketmen said that the rupee, somehow, managed to resist sharp fall versus the dollar during the week. They also said that the local currency may not fluctuate steeply in terms of the dollar in the coming days.

The feature of the week was that State Bank of Pakistan (SBP) held its main policy rate at 13.25% on Friday, taking a second consecutive pause from a series of previous hikes as data pointed to stabilising inflation rate.

The bank last lifted rates in July by 100 basis points, raising the interest rate to 13.25%, its ninth cut since the start of 2018, as it faced rising inflation, a substantial current account deficit and downward pressure on the rupee currency.

INTER-BANK MARKET RATES: On Monday, the rupee gained five paisas in relation to the dollar for buying and selling at Rs 155.34 and Rs 155.37. On Tuesday, the rupee showed slight changes in relation to the dollar for buying and selling at Rs 155.36 and Rs 155.38. On Wednesday, the rupee almost held the overnight levels in relation to the dollar for buying and selling at Rs 155.36 and Rs 155.38.

Also Read: THE RUPEE: Slight gains

On Thursday, the rupee rose by two paisas in relation to the dollar for buying and selling at Rs 155.34 and Rs 155.36. On Friday, the rupee gained four paisas against the dollar for buying and selling at Rs 155.28 and Rs 155.32 respectively, they said.

Rupee depreciated by 10 paisas against the dollar for buying and selling at Rs 155.30 and Rs 155.60, they said. The rupee did not move any side in relation to the euro for buying and selling at Rs 171.00 and Rs 172.50, they said.

OPEN MARKET RATES: On Nov 18, the rupee did not move any side in relation to the dollar for buying at Rs 155.20 while it picked up 10 paisas for selling at Rs 155.40, they said. The rupee shed 20 paisas in relation to the euro for buying and selling at Rs 171.00 and Rs 172.50. On Nov 19, the rupee was inert against the dollar for buying at Rs 155.20 while it slipped by 10 paisas for selling at Rs 155.50, they said. The rupee was inert against the euro for buying and selling at Rs 171.30 and Rs 172.80, they said.

On Nov 20, the rupee was inert against the dollar for buying selling at Rs 155.20 and Rs 155.50, they said. The rupee also did not any side against the euro for buying and selling at Rs 171.30 and Rs 172.80.

On Nov 21, the rupee was inert against the dollar for buying while it gained 10 paisas for selling at Rs 155.40. The rupee held the overnight levels against the euro for buying and selling at Rs 171.30 and Rs 172.80. On Nov 22, the rupee was unchanged versus the dollar for buying at Rs 155.20 while it slipped by 10 paisas for selling at Rs 155.50. The local currency picked up 30 paisas versus the dollar for buying and selling at Rs 171.00 and Rs 172.50 respectively.

OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, major currencies were off to a cautious start on Monday as market players looked to whether Washington and Beijing can soon sign off on a deal to end their trade war that has been a drag on the global economic growth.

Chinese state media Xinhua said on Sunday the two countries had “constructive talks” on trade in a high-level phone call on Saturday, but it gave no further details.

Against the yen, the dollar was traded at 108.75 yen, recovering from 108.235 touched on Thursday as rising hopes of a US-China trade deal undercut the yen.

The currency faces a resistance around 109.00, where it has its 200-day moving average. A break-through there could open the way for a retest of its five-month high around 109.50 touched earlier this month.

The dollar was trading against the Indian rupee at Rs 71.685, the greenback was at 4.152 in terms of the Malaysian ringgit and the US currency was available at 7.013 versus the Chinese yuan.

In the second Asian trade, the dollar fell against the yen on Tuesday as receding hopes for a preliminary trade deal between the United States and China hurt demand for the greenback.

The yuan touched a two-week low versus the greenback amid doubts about the US-China trade war.

The Australian dollar also fell after minutes from a Reserve Bank of Australia policy meeting showed central bankers considered cutting rates this month.

Stocks rise in tumult week

The dollar war trading against the Indian rupee at Rs 71.940, the greenback was available at 4.158 in terms of the Malaysian ringgit and the US currency was at 7.026 versus the Chinese yuan.

In the third Asian trade, the dollar and the safe-haven yen edged higher on Wednesday, but not much, as a lack of clarity on US-China trade talks kept investors cautious.

Ahead of the release of minutes from the US Federal Reserve’s last policy meeting at 1900 GMT, traders were again reading tea leaves on the trade negotiations’ progress.

More upbeat reports hinting that talks were getting down to nuts and bolts were offset by rising tension between the parties over Hong Kong. The US Senate’s approval of bills aimed at protecting human rights there drew a sharp rebuke from China.

After falling overnight, the greenback rose 0.2% on the Australian dollar to $0.6818. It added 0.1% on the New Zealand dollar to $0.6419, toppling the kiwi from a two-week high.

The dollar was marginally higher against the euro at $1.1074 and a fraction stronger against a basket of currencies at 97.889.

The dollar was available against the Indian rupee at Rs 71.700, the greenback was at 4.157 in terms of the Malaysian ringgit and the US currency was at 7.031 in relation to the Chinese yuan.

In the fourth Asian trade, the yuan fell to a three-week low in onshore trade on worries the failure to reach a deal to roll back US tariffs could further harm China’s stuttering economy.

Political tensions between Beijing and Washington were also keeping investors on edge after a source told Reuters that US President Donald Trump is expected to sign into law two bills intended to support anti-government protesters in Hong Kong.

Hong Kong has been rocked by months of increasingly violent protest against Chinese rule of the former British colony. The passage of a US law supporting the protesters is bound to anger Beijing and potentially undermine efforts to secure a trade deal.

In the final Asian trade, the dollar trod water on Friday as a week of mixed messages on the prospect of Sino-US tariff rollbacks left traders on edge and currency markets paralysed, ahead of the release of closely-watched manufacturing data.

The dollar was trading against the Indian rupee at Rs 71.760, the greenback was available at 4.166 in terms of the Malaysian ringgit and the US currency was at 7.028 versus the Chinese yuan.

(This news/article originally appeared in Business Recorder on November 25th, 2019)

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