In the local currency market, the rupee remained under pressure against the dollar and euro during the week in review. Though, the efforts made by the State Bank of Pakistan to help rupee in minimising losses versus major currencies proved effective to some extent, currency analysts are of the view that the rupee will not retreat to Rs61 mark against the dollar from its present level in the current economic scenario, both nationally as well as internationally.

Some currency leaders still fear that the American unit could attain new peak surpassing Rs70 mark, while it will fluctuate between Rs102 and Rs106 against the euro in coming weeks.

In the inter bank market, the rupee commenced the week on a negative note as it extended its weakness versus the dollar, despite efforts by the State Bank of Pakistan to end speculative trading and help minimise losses in rupee value. In early trading session, the rupee went as low as Rs68.50 and Rs69.00 against the dollar. Later it managed to trim some losses and recovered 25 paisa to close the day at

Rs68.25 and Rs68.75. But at this level the rupee/dollar parity was still lower by 175 paisa over the previous week close of Rs66.50 and 67.00. There was a gap of 50 paisa between buying and selling rates.

On the second trading day of the week in review, the rupee continued to post losses against the dollar, shedding ten paisa on the buying counter, while it managed to recover 35 paisa on the selling counter, changing hands and Rs68.35 and Rs68.40 and reducing the gap between buying and selling rates to only five paisa on May 13. Importers fresh demand for dollar on the third trading day exerted downward pressure on the rupee, which suffered fresh losses against the dollar on May 14. The gap between buying and selling rates increased to 20 paisa. The dollar was seen trading at Rs68.60 and Rs68.80 after shedding 25 paisa on the buying counter and another 40 paisa on the selling counter.

Rupee weakness persisted on the fourth trading day, due to surging dollar demand by the importers. The rupee/dollar parity suffered fresh losses of 30 paisa trading at Rs68.90 and Rs69.10 on May 15. The gap between buying and selling rates widened to 80 paisa. On May 16, the demand for dollars remained high while exporters were still on the sidelines. However, the rupee held its overnight levels against and traded unchanged at Rs68.90 and Rs69.10. During the week in review, the rupee in the inter bank market lost Rs2.40 against the dollar.

In the open market, SBP measures helped the rupee to regain slight strength against the dollar on May 12.The rupee recovered five paisa and traded at Rs67.85 and Rs67.95 versus the dollar after closing last week at Rs67.90 and Rs68.00. The rupee remained under demand pressure on May 13, when it failed to maintain overnight firmness versus the dollar and lost 40 paisa on the buying counter and another 45 paisa on the selling counter, changing hands at Rs68.25 and Rs68.40.

On May 14, the rupee continued its slide against the dollar, shedding 10 paisa more to trade at Rs68.35 and Rs68.50. The rupee continued its weakness, posting fresh losses of 45 paisa on May 15, when the dollar traded at Rs68.80 and Rs68.95. The rupee continued its downtrend versus the US currency on May 16 and further shed 10 paisa on the buying counter and five paisa on the selling counter to close at Rs68.90 and Rs69.00. This week, the rupee in the open market lost 100 paisa against the dollar.

Versus the European single common currency, the rupee opened the week on a positive note recovering 95 to trade at Rs103.85 and Rs103.95 against previous week close of Rs104.80 and Rs 104.90 on May 12. However, on the following day, it failed to hold ground versus the euro and lost 30 paisa to trade at Rs105.10 and Rs105.20 on May 13. The rupee continued its downtrend on May 14 further losing 40 paisa and changing hands at Rs105.50 and Rs105.60.

On May 15, the rupee managed to reverse its weakening trend versus euro, recovering 30 paisa to trade at Rs105.20 and Rs105.30. The rupee failed to retain its overnight gains against euro on May 16, as it shed 50 paisa and traded at Rs105.70 and Rs105.80, bringing cumulative fall in rupee value against the European single common currency this week to Rs1.85.

On the international front, the dollar rose against the Japanese yen and Swiss franc on the opening day of the week in review In New York trade, the dollar was trading at 103.90 yen, up one per cent on May 12. Against the Swiss franc, the dollar was up 0.4 percent at 1.0445 francs. The euro vaulted 1.4 per cent to an intraday peak of 161.42 yen, helping the euro zone currency to erase losses against the dollar. The euro last traded up 0.4 per cent at $1.5534. Sterling was up 0.3 per cent at $1.9585, over a cent up from the day’s low of $1.9445.

On May 13, the US dollar rallied broadly after a report on April retail sales beat forecasts and supported views that the Federal Reserve will probably stop cutting interest rates next month. The euro dropped earlier to a session low of $1.5431. In late trading, it was down 0.4 percent at $1.5479.

On May 14, the yen eased broadly as a tame US consumer inflation report for April boosted stocks and raised investor appetite for risk. The unexpectedly slow increase in the consumer price index (CPI) briefly caused traders to sell the dollar, but analysts said it did not alter market views that the Federal Reserve’s cycle of interest rate cuts was almost over. The dollar jumped to a session high of 105.44 yen, with Wall Street stocks surging as inflation worries eased. The greenback last traded at 105.02 yen, up 0.2 per cent on the day. The euro gained 0.3 per cent to 162.42 yen while the Canadian dollar soared 0.6 per cent to 104.89 yen.

The dollar erased earlier gains against the euro in what analysts called a knee-jerk reaction to the CPI report. The euro was last trading at $1.5460, flat on the day, but off earlier troughs at $1.5397. It briefly rose to a session high of $1.5486. Sterling hit a three-month low versus the dollar.

On May 15, the dollar slumped to a session low of 104.44 yen and was last trading at 104.64 yen, down 0.4 per cent on the day. The dollar rebounded versus the euro as US stocks extended gains. The euro was last down 0.1 per cent at $1.5462 after hitting a session high earlier of $1.5547. Sterling slipped staying trapped near three-month lows hit the previous day against the dollar as the currency was pressured by the prospect that higher UK inflation risks would strangle economic growth. It was down 0.15 per cent at $1.9433, having hit a three-month low at $1.9363 on May 14.

At the close of the week on May 16, the dollar paused against the yen in Tokyo, struggling to sustain gains near two-month highs as weak economic data raised concerns about US growth prospects. It was little changed from late US trade at 104.60 yen.

The dollar had slipped from around 104.89 yen after the Japanese growth data, moving further from the peak of around 105.70 yen hit at the start of the month, the highest since late February. The euro rose nearly 0.3 per cent to $1.5487. The pound was steady at $1.9467. The franc gained 0.2 per cent compared to the New York close against the dollar, trading at 1.0539 per dollar.