IN the local currency market, the rupee this week moved both ways against the dollar. The rupee was seen in search of a direction. The demand for dollar was seen mounting but dollar inflows were sufficient to cater demand.

This week, banks remain closed on July 23 for Zakat deduction being first of Ramadan. There was no trading in currencies on the interbank market in the week’s opening trading session.

However, when banks commenced activities on July 24, currency dealers observed some hectic trading in dollars, exerting pressure on the rupee in the second trading session.

The rupee drifted lower against the dollar and shed nine paisa on the buying counter and eight paisa on the selling counter, changing hands versus dollar at Rs94.53 and Rs94.56.

The rupee further shed two-paisa against the dollar and traded at Rs94.55 and Rs94.60 in the third trading session. It, however, remained flat in the fourth trading session, trading unchanged at its overnight level of Rs94.55 and Rs94.60 against the dollar.

The rupee did not show any change against the dollar in the last trading session, retaining its overnight levels at Rs94.55 and Rs94.60 for the third day in a row.

However, on week over week basis, the dollar in the interbank market gained 12 paisa against the rupee this week. The dollar had closed last week at Rs94.44 and Rs94.48.

In the open market, the rupee this week showed steady trend versus dollar, moving both ways in narrow band. No major development was seen in the market and currency players remained in a fix. While interbank dealings remained suspended on July 23, due to banks closure for Zakat deduction on First of Ramadan, no pressure was seen in the open market on the rupee/dollar parity in the first trading session.

The rupee traded unchanged against the dollar at last weekend’s level of Rs94.65 and Rs94.85. It, however, drifted lower in the second trading session and shed 15 paisa, changing hands against the dollar at Rs94.80 and Rs95.00.

The rupee in the third trading session managed to recover overnight losses only partially against the dollar, gaining five-paisa at Rs94.70 and Rs94.90. The parity traded unchanged at its overnight levels of Rs94.70 and Rs94.90 in the fourth trading session.

The week ended on a stable note as the rupee traded unchanged against the dollar for the third consecutive day at Rs94.70 and Rs94.90 in the last trading session. During the week, the dollar in the open market gained five paisa in relation to rupee. The dollar had closed last week at Rs94.65 and Rs94.85.

Versus the European single common currency, the rupee this week displayed strength, moving in narrow ranges between Rs114.30/Rs115.60 for buying and Rs115.30/Rs116.60 for selling after euro fell to a two-year low against the dollar in the international market, hitting its weakest level since June 2010 on July 23.

The rupee, however, commenced the week on stable note and traded unchanged in the open market at previous weekend’s level of Rs114.80 and Rs115.80 amid dull trading in the first trading session. It further extended its overnight firmness, posting another 20 paisa gain versus euro which traded at Rs114.60 and Rs115.60 in the second trading session.

The rupee continued its upward advances against euro for the third straight day, hitting its highest level during the week at Rs114.30 and Rs115.30 after picking up another 30-paisa in the third trading session.

In the fourth trading session, the rupee failed to hold firm ground versus euro and shed 40 paisa to trade at Rs114.70 and Rs115.70 after euro soared to a two-week high against the dollar in the international market, showing its best one day performance since June 29.

The rupee continued its slide versus euro for the second successive day on July 27, and shed 90 paisa in the last trading session, closing the week at Rs115.60 and Rs116.60, its lowest level in the week and also 0.7 per cent lower over the previous week close.

On the international front, the euro fell to a two-year low against the US dollar and a nearly 12-year trough against the yen in New York first trading session, on fears Spain is edging closer to needing a full-scale bailout that the euro zone cannot afford.

That saw the euro drop for a fourth straight day against the dollar to hit a low of $1.2067, the weakest since June 2010. The euro last traded at $1.2135, down 0.2 per cent. Against the yen, the dollar fell to a seven-week low of 77.95 yen, before rebounding to 78.43, little changed on the day. Sterling touched a week-low against the dollar in London, losing by 0.8 per cent to hit a session low of $1.5486 against the dollar, the lowest level in a week.

On July 24, the euro tumbled to a two-year low against the dollar for a third consecutive session, pressured by weaker-than-expected German data.

The euro fell as low as $1.2040, its weakest level since June 2010. It was last at $1.2062, down 0.4 percent. Against the yen, the dollar lost 0.3 percent to 78.16 yen. Sterling firmed against the dollar in London, up 0.15 percent to $1.5582.

On July 25, the euro rose against the dollar for the first time in six days after a European Central Bank official said he could see grounds for giving the euro zone bailout fund a banking license that would increase its crisis fighting firepower. The euro hit a session high of $1.2169, recovering from a two-year low of $1.2040 set on Tuesday. It was last up 0.8 percent at $1.2154.

Against the yen, the dollar was little changed at 78.15 yen. Against the dollar, the pound fell to as low as $1.5459 in London trade.

On July 26, the euro headed for its best day against the dollar in a month, rising to a two-week high of $1.2329, nearly 3 cents above a two-year low set earlier this week. It was last up 1 percent at $1.2282. The dollar rose 0.1 percent to 78.20 yen. The pound jumped against the dollar in London to its highest in nearly a week, rising around 1.4 percent on the day to $1.5724 , and well above a two-week low of $1.5458 struck earlier in the day.

At the close of the week on July 27, the euro climbed to a three-week high against the dollar and was last up 0.7 percent at $1.2364, closer to the session peak of $1.2377 than the session low of $1.2240.

The dollar gained 0.4 percent against the yen, trading at 78.53 yen, with a one-week high of 78.64 yen.

In London, the pound rose to a five-week high against the dollar, up 0.3 percent at $1.5730, having risen as high as $1.5768 earlier in the day.