The Rupee: More recovery likely

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SOURCEBusiness Recorder
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KARACHI: The rupee appreciated against the dollar on the money market during the week, ended on Dec 6, 2019.

INTER-BANK MARKET: The rupee managed to gain modestly in relation to the dollar for buying and selling at Rs 155.05 and Rs 155.10.

OPEN MARKET RATES: The rupee appreciated by 50 paisas versus the dollar for buying and selling at Rs 154.70 and Rs 155.00. The rupee was available against the euro for buying and selling at 170.00 and Rs 171.70.

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Commenting on the rupee’s gains against the dollar, some leading experts observed that the rupee is likely to move higher in the coming days.

The dollar will depreciate gradually versus the rupee due to falling demand by the investors and common persons, they said. Some times ago, dollar’s surge attracted buyers, who had no other option for investment as a save haven, they added.

It is difficult to predict about the rupee’s surge in terms of the dollar, they said and adding that during the last few months, it appeared that the rupee depicted strength in terms of the US currency.

INTER-BANK MARKET: On Monday, the rupee shed five paisas in terms of the dollar for buying and selling at Rs 155.29 and Rs 155.31 respectively, they said.

Also Read: THE RUPEE: Gains more grounds

On Tuesday, the rupee managed to gain 13 paisas in relation to the dollar for buying and selling at Rs 155.18 and Rs 155.20, they said.

On Wednesday, the rupee picked up five paisas in relation to the dollar for buying and selling at Rs 155.13 and Rs 155.15. On Thursday, the rupee extended overnight gains in relation to the dollar for buying and selling at Rs 155.09 and Rs 155.11.

On Friday, the rupee inched up in relation to the dollar for buying and selling at Rs 155.05 and Rs 155.10.

OPEN MARKET RATES: On Dec 2, the rupee picked up 10 paisas versus the dollar for buying and selling at Rs 155.20 and Rs 155.40 respectively, they said. The rupee was available against the euro for buying and selling at Rs 170.30 and Rs 171.80 respectively, they said. On Dec 3, the rupee was unchanged against the dollar for buying and selling at Rs 155.20 and Rs 155.40. The rupee was almost unchanged against the euro for buying and selling at Rs 171.20 and Rs 172.70.

On Dec 4, the rupee rose by 20 paisas against the dollar for buying and selling at Rs 155.00 and Rs 155.20, they said. The rupee managed to gain 40 paisas against the euro for buying and selling at Rs 170.80 and Rs 172.00, they said.

On Dec 5, the rupee followed the same pattern versus the dollar, picking up 20 paisas for buying at Rs 154.80 it also rose by 10 paisas for selling at Rs 155.10. The rupee was trading against the euro for buying and selling at Rs 170.50 and Rs 172.20.

On Dec 6, the rupee managed to hold overnight levels versus the dollar for buying and selling at Rs 154.80 and Rs 155.10. The rupee, however, shed 20 paisas against the euro for buying 170.70 while it held the overnight level for selling at Rs 172.20.

On Dec 7, the rupee picked up 10 paisas versus the dollar for buying and selling at Rs 154.70 and Rs 155.00. The rupee also gained sharply against the euro for buying and selling at 170.00 and Rs 171.70.

OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, the Japanese yen hit a six-month low on Monday as investors cheered an unexpected rebound in Chinese manufacturing, while a tightening British election race knocked the pound.

The safe-haven yen fell 0.2% to 109.72 per dollar, its lowest since May, and riskier currencies rallied after two surveys showed Chinese factory activity expanding.

The dollar was trading against the Indian rupee at Rs 71.710, the greenback was available at 4.178 versus the Malaysian ringgit and the US currency was at 7.031 in terms of the Chinese yuan.

In the second Asian trade, the dollar traded near a one-week low versus the yen on Tuesday and near the lowest in almost two weeks against the euro, on concern about weak US manufacturing data and signs of new fronts in the US trade war.
Sentiment took a hit after US President Donald Trump announced tariffs on metal imports from Brazil and Argentina.

Investors are also worried about whether the United States and China will be able to reach a deal soon to scale back their 17-month long trade war, while more tariffs on other countries’ goods would pose an additional risk to the global economic outlook.

The dollar was trading versus the Indian rupee at Rs 71.600, the greenback was at 4.172 in terms of the Malaysian ringgit and the US currency was available against the Chinese yuan at 7.043.

In the third Asian trade, the yen and Swiss franc held gains against the dollar on Wednesday as appetite for safe-havens spiked after US President Donald Trump warned a trade deal with China might not be in place until after the 2020 US presidential election.

That sent the Chinese yuan to a 5-1/2-week low against dollar as investors feared the United States could carry out its plan to raise tariffs even further on Chinese goods on Dec. 15.

The US currency, however, was broadly sold against its major rivals, which helped sterling climb to its highest level in more that six months on the greenback.

The dollar was available against the Indian rupee at Rs 71.730, the greenback was at 4.179 in terms of the Malaysian ringgit and the US currency was trading versus the Chinese yuan at 7.068.

In the fourth Asian trade, the dollar wobbled on Thursday as an earlier boost from upbeat trade comments by US President Donald Trump ran out of steam and investors remained on edge over Sino-US tensions.

In a fillip to sentiment overnight, Trump said talks to resolve the damaging trade war with China were going “very well”. Bloomberg also reported that the two sides are moving closer to an agreement, citing people familiar with the talks.

However, with no official reassurance from the Chinese on Thursday, and only a day after Trump said a deal might not come until after the 2020 presidential election, the recovery promptly stalled in Asian trade.

Movements in major currencies were modest. The safe-haven Japanese yen steadied at 108.84 per dollar, while the Swiss franc inched higher to 0.9879 per dollar. The euro firmed marginally against the dollar to $1.1084, which pushed the greenback down 0.1% against a basket of currencies to 97.551.

The dollar was trading against the Indian rupee at Rs 71.500, the greenback was at 4.171 in terms of the Malaysian ringgit and the US currency was at 7.053 versus the Chinese yuan.

In the final Asian trade, the dollar nursed a week of losses on Friday, hit by nervousness on trade and mixed signals about the US economy, while the British pound stood tall as bets firmed that Prime Minister Boris Johnson can win a commanding electoral victory.

The safe havens of the Japanese yen and Swiss franc were in demand as a hedge against Sino-US trade talks collapsing, and as investors fretted that US jobs figures due later in the day may fail to deliver an expected rebound.

The euro held on to overnight gains against the greenback to buy $1.1104, having climbed 0.8% this week. The yen has added 0.9% on the dollar this week and was steady at 108.72 yen per dollar on Friday.

Against a basket of currencies the dollar has dropped every day this week for a cumulative loss of almost 1%.

The best gains have been won by the soaring kiwi and British pound. The kiwi sat just below a four-month high touched on Thursday at $0.6541, having gained 1.8% this week as expectations for deep monetary easing have ebbed.

Sterling climbed to a 2-1/2 year high of 84.28 pence against the euro overnight-holding near there on Friday-and has advanced 1.7% against the dollar this week, last trading at $1.3158.

The dollar was available against the Indian rupee at Rs 71.283, the greenback was at 4.161 in terms of the Malaysian ringgit and the US currency was trading versus the Chinese yuan at 7.048.

In the final US trade, the dollar gained on Friday after five straight days of losses, lifted by data showing the US economy created many more jobs than expected in November, backing the Federal Reserve’s stance of keeping interest rates on hold after cutting them three times this year. Gains in the dollar were fairly modest despite the robust jobs number, however.

The greenback has been pummelled all week due to a slew of weaker-than-expected data in the US manufacturing and services sectors, with investors coming to grips with the reality that the economy is slowing down.

Friday’s jobs report provided a respite from all the pessimism and from the continuing uncertainty over the status of US-China trade negotiations.

(This news/article originally appeared in Business Recorder on December 9th, 2019)

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