DIVERGENT trends were witnessed in the local currency market this week. Strong demand for dollar was seen emerging during the week, exerting mild pressure on the rupee.

Dollar supplies were somewhat tight in the week’s early sessions. The rupee hit almost three week’s peak and crossed Rs95 barrier against the dollar in the open market.

It, however, traded in narrow ranges against the dollar, moving both ways between Rs94.00 and Rs94.40 in the interbank dealings.

On the interbank market, the rupee showed a stable trend in the week’s opening session on July 9, holding its last weekend firmness against the dollar unchanged at Rs94.05 and Rs94.10. But in the second trading session, the rupee lost 30 paisa amid rising demand, pushing dollar higher at Rs94.35 and Rs94.40.

The rupee, however, recovered moderately versus the dollar and posted 15paisa gain in the third trading session, changing hands at Rs94.20 and Rs94.25.

It failed to extend its overnight firmness against the dollar in the fourth trading session and drifted lower, sliding by 10 paisa at Rs94.30 and Rs94.35.

The week ended on the negative note as the rupee further extended its fall against dollar in the week’s closing session, losing five paisa at Rs94.35 and Rs94.40. On week over week basis, the rupee in the interbank market lost 30 paisa against the dollar this week.

On year-on- year basis, It was lower by five paisa. Last year on July 13, interbank dollar rate was Rs94.25 and Rs94.30.

In the open market, the rupee gave up past two week’s upward rising trend against the dollar.

It breached Rs95 barrier after assuming declining trend this week.

The rupee commenced the week on a positive note as it managed to gain sharply against dollar, depicting 20 paisa rise at Rs94.00 and Rs94.20 in the first trading session after closing last week at Rs94.20 and Rs94.40. It, however, drifted lower in the second trading session when it posted 50 paisa loss against the dollar and traded at Rs94.50 and Rs94.70.

The rupee traded unchanged at Rs94.50 and Rs94.70 in the third trading session but it shed 25 paisa and traded against the dollar at Rs94.75 and Rs94.95 in the fourth trading session.

This downtrend persisted in the last trading session as the rupee further lost 35 paisa, closing the week at Rs95.10 and Rs95.30 against the dollar, a level last seen on June 21. During the week in review, the rupee in the open market suffered 90 paisa loss against the dollar.

It has, however, depreciated by 8.8 per cent over the past 12 months.

Versus the European single common currency, the rupee witnessed range-bound trading this week.

In the opening trading session, it rose as high as Rs115.80 and Rs116.80, depicting an appreciation of 20 paisa against previous weekend’s Rs116.00 and Rs117.00.

The rupee, however, gave up its overnight firmness and posted 40 paisa loss in the second trading session and was changing hands against euro at Rs116.20 and Rs117.20. It further shed 30 paisa in the third trading session and traded at Rs116.50 and Rs117.50 on July 11.

In the fourth trading session, the rupee rebounded sharply and reverts to July 10 level after picking up 30 paisa at Rs116.20 and Rs117.20. Finally in the last trading session, the rupee further extended its overnight firmness for the second successive day. It gained 20 paisa against euro before closing the week at Rs116.00 and Rs117.00, unchanged from last weekend’s level.

In the last two trading sessions this week, the rupee recovered 50 paisa against the European single common currency.

On the international front this week, the euro gained against the dollar in a mostly technical rebound from a two-year low touched in the New York first trading session and was last up 0.2 percent against the dollar at $1.2314 after climbing as high as $1.2324 and well off a low of $1.2255 hit in early trade.

The dollar was last down 0.1 percent at 79.58 yen. In London, sterling edged up 0.2 percent against the dollar to $1.5520.

On July 10, the euro plunged to a two-year low against the dollar falling as low as $1.2233, its lowest since July 1, 2010.

It last traded at $1.2253, down 0.5 percent. Against the yen, the dollar last traded down 0.2 per cent against the yen at 79.42 yen.

In London, sterling was lower against the dollar, trading down 0.2 per cent at $1.5495, edging closer to a one-month low of $1.5461.

On July 11, the dollar pushed euro to a fresh two-year low at $1.2211 but was last at $1.2237, down 0.1 percent. The single currency has fallen about 5.5 percent so far this year, exceeding losses racked up in 2011, when it fell more than 3 percent.

The dollar was up 0.3 per cent against the yen at 79.64 yen. In London, the pound was last up 0.3 per cent at $1.5562.

On July 12, the euro hit a new two-year low against the dollar and was down 0.3 per cent to $1.2205 after dropping to $1.2165, the weakest since the end of June 2010.

The euro has shed 5.9 percent versus the dollar so far this year, almost double the losses it chalked up for all of 2011.

The dollar slipped 0.6 per cent to 79.28 yen after the Bank of Japan held off on further policy easing despite slowing global growth, convinced that robust domestic demand will keep Japan’s economic recovery on track. Sterling slipped to a five-week low against the dollar in London, dropping 0.6 per cent to as low as $1.5393 - a level not seen since June 6.

At the close of the week on July 13, the euro rose against the dollar for the first time in four days and last traded at $1.2234, up 0.3 per cent, after falling as low as $1.2160 earlier, marking the lowest level since mid-2010.

Against the yen, the dollar was last down 0.1 per cent at 79.18 yen. In London, sterling rose against the dollar as firmer equity markets encouraged investors to buy riskier currencies.

It was up 0.8 percent to $1.5541 against the dollar, nearing a high of $1.5578 hit earlier this week.