No major development was seen in the local currency market where the rupee continued to fluctuate against the dollar and euro in range-bound trading amid mixed sentiments last week.

In the international market, however, currency investors across the globe cautiously awaited the FOMC outcome amid increasing speculations on a potential rate hike by the Federal Reserve.

The dollar retreated as market participants were seen cashing up recent strong gains ahead of the US Federal Open Market committee and Bank of Japan meetings during the week.

However, the dollar extended losses against a basket of major currencies in international trade and fell to its lowest in a week after the US Federal Reserve left monetary policy unchanged and projected a less aggressive rise of interest rates in coming years.

Meanwhile, the sterling began the week on the front-foot against the dollar but suffered sizable losses versus most of the majors.

The pound to dollar exchange rate remained close to its weakest level in a month after the sterling skidded over 1pc to hit a five-week low close, against the dollar, last week as worries on Britain’s exit from the European Union kept pressure on the currency.

During the week in review, the rupee lost against euro

In the domestic currency market last week, the rupee commenced on a stable note against the dollar on the interbank market, thought it ended the week on a negative note as it further drifted lower against the dollar for the fourth consecutive session, hitting fresh month lows at Rs104.83 and Rs104.85 after losing four-paisa in the last trading session.

In overseas trade, the dollar index edged higher, reversing earlier selling, after the Federal Reserve trimmed its long-term rate expectations.

During the week, the rupee to dollar exchange rate on the interbank market remained close to its weakest level in a month after the dollar managed to gain 22paisa against the dollar on week on week basis.

In the open market, the rupee-dollar parity did not show any change over the prior weekend levels.

The dollar closed the week at Rs105.10 and Rs105.30, its highest level in two weeks.

On week on week basis, however, the dollar gained ten-paisa against the rupee last week.

Against euro, the rupee continued to escalate amid range-bound trading for another week. The euro closed the week at Rs116.75 and Rs118.25, a level last seen on Sept9.

During the week in review, the rupee lost 95paisa while gaining 45paisa against euro on the buying counter in two sessions.

On the selling counter, on the other hand, euro gained Rs1.20 against the rupee in three sessions while losing 45paisa in two sessions.

On week on week basis, however, the rupee lost 50paisa on the buying counter and 75paisa on the selling counter against the euro last week.

Published in Dawn, Business & Finance weekly, September 26th, 2016