In the local currency market, the dollar was seen riding high against the rupee in 2012. Despite several attempts to hit Rs100 mark, the dollar failed to touch that level before year-end.

All projections and forecasts of leading currency dealers and analysts who were eyeing dollar at Rs100 in 2012 proved wrong.

Nevertheless, the greenback remained at historic highs against the rupee during the year, hitting all time high above Rs99 on December 17. However, following SBP’s intervention, the rupee has been trading in the Rs97-Rs98 range since then. In 2012 alone, the rupee depreciated by 8.4 per cent against the dollar. While in the past four years of the present government, the currency is almost 20 per cent down. Though the rupee has been successful in restricting dollar from hitting Rs100 in 2012, analysts now fear that the dollar could hit this level by first half of 2013. 2013 is clouded with fears and challenges.

Meanwhile on the interbank market, the rupee commenced the week on a positive note as it bounced back against the dollar, posting eight-paisa gain on the buying counter and nine-paisa gain on the selling counter in the first trading session. As a result, the dollar slipped from previous weekend’s Rs97.20 and Rs97.25 and hit the week’s lowest level at Rs97.12 and Rs97.16 in the first trading session of this week. Currency trading remained suspended on the interbank market on January 1, as banks were
closed on account of Bank Holiday.

On January 2, which marked the first trading day of the year 2013 and the second trading session of the week in review, the rupee suffered first fall of the year, posting 23-paisa decline on the buying counter and another 22-paisa decline on the selling counter with dollar changing hands at Rs97.35 and Rs97.38. In the third trading session, the rupee shed eight-paisa at Rs97.43 and Rs97.46. The rupee further extended its decline versus the dollar in the last trading session. It lost seven paisa on the buying counter and nine paisa on the selling counter before closing the week at Rs97.50 and Rs97.55. On week-over-week basis, the dollar in the interbank dealings thus gained 30 paisa in relation to the rupee this week.

In the open market, the rupee came under renewed pressure against dollar in the week that commenced on the last day of the outgoing year. However, it moved positively versus the greenback in the first trading session as it managed to pick up 10 paisa and was last seen changing hands at Rs97.60 and Rs97.80 against last week close at Rs97.70 and Rs97.90. Though dollar supply was affected by the closure of the international financial market due to Christmas and New Year holidays, the local market witnessed smooth trading amid low dollar demand in the second trading session at the start of the year 2013. As a result, the rupee showed a steadier trend against the dollar on the week’s second day, which was the first day of the year 2013, trading unchanged at previous day’s close of Rs97.60 and Rs97.80.

In the third trading session, demand for dollar suddenly mounted and pushed the rupee in the negative zone. The rupee shed 20 paisa and closed the day at Rs97.80 and Rs98.00 against the dollar. This was the first decline in the rupee value in the year 2013. The rupee further extended its overnight weakness for the second successive day, shedding 10 paisa with the dollar climbing to Rs97.90 and Rs98.10 in the fourth trading session.

The week finally ended on a negative note as the rupee continued its downward trend in relation to the dollar. It shed 30 paisa and traded at Rs98.20 and Rs98.40 in the last trading session. During this week, the rupee in the open market lost 50 paisa against the dollar. However, in the first three trading sessions of 2013, the rupee has already gained 60 paisa against the rupee.

Versus the European single common currency, the rupee ended the year 2012 on a positive note, posting fresh gain of 50 paisa and trading at Rs128.00 and Rs129.00 on the last day of the year which was also the first trading day of the current week.
Trading remained dull in the absence of any major development in the current week, with the rupee entering the year 2013 on a negative note. It lost 30 paisa in the second trading session, when euro climbed to the week’s second highest level at Rs128.30 and Rs129.30.

In the third trading session, the rupee, however, managed to recover overnight losses partially, picking up 10 paisa versus the euro at Rs128.20 and Rs129.20. But then it drifted lower and slipped back to Rs128.30 and Rs129.30 in the fourth trading session, shedding 10 paisa over the previous day close. The week ended on a positive note as the rupee managed to pick up 70 paisa against the euro in the last trading session to trade at the week’s highest levels at Rs127.60 and Rs128.60. On
week-over-week basis, however, the rupee lost 10 paisa against euro this week. In 2012, the rupee has depreciated by 9.2 per cent versus euro.

On the international front, the dollar ended 2012 little changed against major currencies amid thin trading on December 31. In the NY first trading session, the euro was down 0.2 per cent on the day at $1.3192. The yen continued its slide against the dollar and was last up 0.8 per cent on the day at 86.75 yen. In London, sterling was on track to finish the year with annual gains against the dollar on the last trading session of 2012 at $1.6170.

On January1, financial markets were closed being New Year Day Holiday. On January 2, however, the euro fell by 0.2 per cent to $1.3185 after having earlier hit a high of $1.3299, the highest in two weeks, and not far from an eight-and-a-half-month high on December 19. It has gained nearly 10 per cent since late July. The dollar rose 0.7 per cent to 87.26 yen, having touched 87.33 yen earlier, its highest since late July 2010. Sterling rose against the dollar in London, last up 0.3 per cent at $1.6294, off an earlier peak of $1.6380, its highest since late August 2011.

On January 3, the euro fell to a three-week low against the dollar, last down one per cent at $1.3051, in a second straight session of declines. The session low of $1.3047 was the weakest since December 13.

Against the yen, the dollar fell by 0.1 per cent to 87.26 yen, after climbing as high as 87.36 earlier in the global session, the highest since July 2010. In London, sterling retreated further from a recent 16-month-high against the dollar, down 0.5 per cent at $1.6169.

At the close of the week on January 4, the dollar rose to a near 30-month high against the yen in NY last trading session, rising as high as 88.40 yen, the highest since July 2010. It last traded at 88.17 yen, up 1.1 per cent. The euro held steady at $1.3045.

Earlier, it fell to $1.3019, its lowest since December 12. Sterling fell to its lowest in more than three weeks against the dollar in London, last down 0.4 per cent on the day at $1.6039, having earlier dropped as low as $1.6010, its weakest since December 10.