However, it managed to appreciate marginally by five paisa against the dollar on the second trading day amid rising demand and traded at Rs83.25 and Rs83. 30 on October 6. On October 7, despite pressure the rupee further extended its overnight gains against the dollar, rising by 15 paisa to trade at Rs83.10 and Rs83.15 amid rising demand for dollars.

It drifted lower against the dollar on the third trading day, losing 10 paisa on the selling counter. It however traded unchanged on the buying counter. The dollar was at Rs83.10 and Rs83.25 on October 8. On October 9, the supply of dollar was strong but heavy demand for the US currency continued to exert pressure on the rupee which lost 10 paisa against the dollar which was seen trading at Rs83.20 and Rs83.25 at close. During this week, the rupee in the inter-bank market showed an appreciation of three paisa against the dollar. It lost 17 paisa in two trading sessions and gained 20 paisa in three trading sessions.

In the open market, the rupee/dollar parity showed mixed sentiments this week. On the week's opening day, the rupee shed 10 paisa and traded versus the dollar at Rs83.10 and Rs83.20 after closing last week at Rs83.00 and Rs83.10. However it did not show any change on the second trading day, with dollar trading at its overnight level. On October 7, the rupee managed to rebound against the dollar as it gained 10 paisa and traded at Rs83.00 and Rs83.10. On October 8, the rupee/dollar parity revert to the week's opening day position after the rupee shed 10 paisa in terms of the greenback and traded at Rs83.10 and Rs83.20.

However, the rupee managed to gain five paisa against dollar and traded at Rs83.05 and Rs83.15 on the last trading day. This week, the rupee in the open market restricted its decline versus dollar to five paisa over the previous week close amid fluctuations. During the week it managed to recover 15 paisa against the dollar in two trading sessions but lost 25 paisa in three trading sessions. The parity in terms of rupee was at its lowest level at Rs83.10 and Rs83.20 on October 5 and its highest level at Rs83 and Rs83.10 on October 7.

Versus the European single common currency, the rupee assumed a steady falling trend this week after commencing the week on a negative note. It posted a sharp decline of 75 paisa over the previous week close, changing hands at Rs121.05 and Rs121. 55 on October 5. The rupee had closed last week at Rs120.30 and Rs 120.80 against euro last week. The rupee extended its overnight weakness on October 6, posting 50 paisa loss versus euro to trade at Rs121.55 and Rs122.05.

On October 7, the rupee shed another 25 paisa and traded against the euro at Rs121.80 and Rs122.30. A further decline of 10 paisa on October 8 enabled the euro to trade at Rs121.90 and Rs122.40 against the local currency. The downtrend in the rupee/euro parity persisted on the fifth trading day. The rupee lost 5 paisa against euro which was changing hands at Rs121.95 and Rs122.45 on October 9. During the week in review, the rupee on cumulative basis shed 165 paisa against the European single common currency.

On the international front, the dollar fell against other major currencies on the opening day of the week after a meeting of finance chiefs from the Group of Seven wealthy nations underscored the market's view that policy-makers are resigned to a gradually weakening dollar. In late New York trading, the euro climbed 0.6 per cent to $1.4653. The dollar fell 0.3 per cent to 89.53 yen, above a recent eight-month low of 88.23 yen hit on electronic trading platform EBS. Against a broadly lower dollar, sterling was flat at $1.5940.

On October 6, the euro rose 0.4 per cent to $1.4712 and the dollar fell 0.8 per cent to 88.77 yen. The Australian dollar rallied as high as $0.8919, according to Reuters data, and last traded up 1.4 per cent at $0.8893. Sterling slipped 0.1 per cent to $1.5920, having dropped nearly 2 US cents from the day's high to around $1.5875. The pound was above a four-month low of $1.5770 hit a week ago.

On October 7, the dollar recovered some ground against the euro and other major currencies after the dollar's year long slide looked to have resumed this week.

In late trading, the dollar was off 0.1 per cent at 88.64 yen, after earlier trading as low as 88.01 yen, its lowest level since late January. The euro fell 0.3 per cent to $1.4678. In other trading, the Australian dollar rose to $0.8951, its highest since early August 2008, before retreating to trade 0.1 per cent lower at $0.8900. Sterling slipped 0.1 per cent on the day against the dollar to $1.59.

On October 8, the euro was up 0.6 per cent at $1.4777, after hitting a session high of $1.4817, the highest level in two weeks. Against the yen, the dollar was down 0.2 per cent at 88.45 yen. Previous day's eight-month low of 88.01 yen was the most immediate target and a break below that would bring January's 13-year low of 87.10 yen into view as traders test how far and fast Japan's ministry of finance will let the currency strengthen. The Australian dollar jumped 1.6 percent to $0.9054. Sterling rose against a broadly weaker dollar. It traded around $1.6070, up around 0.7 per cent on the day.

At the close of the week on October 9, the dollar rose after Federal Reserve Chairman indicated monetary policy may have to be tightened as a recovery takes hold, lifting the greenback off 14-month lows against a basket of currencies. In Tokyo, the euro fell 0.4 per cent to $1.4728. The euro had climbed as high as $1.4818 on trading platform EBS the previous day, near a one-year high of $1.4845 hit in late September. The dollar rose as high as 89.32 yen from an earlier low of 88.36 yen, before trading at 89.23 yen, up 0.9 percent. Sterling was down 0.8 per cent on the day at $1.5933, after hitting a session low of $1.5905.