The week saw a mixed trend as far as the movement of rupee against the dollar is concerned.  In the beginning of the week, the rupee was sharply higher against the greenback but in the middle of the week, it weakened against the dollar.  The heavy rains in Mumbai also effected the rupee.  The trading volumes were very thin on Wednesday and Thursday due to lack of staff, which was not able to attend office due to heavy rains.  Towards the end of the week, the rupee was again quoting marginally higher against the dollar.  The detailed report follows:

Friday, July 14

The rupee ended the day stronger against the dollar at 44.705/7125 amid huge dollar inflows in the inter bank forex market.  There were large dollar supplies during the day but most of it was bought by some oil PSUs and some State run banks.  These were remittances received by the banks on Wednesday and Thursday, which were converted today.   There was not much of a trading during Wednesday and Thursday due to heavy rains in Mumbai.  But these inflows were mopped up by some oil PSUs and a fertilizer PSU and also by some of the State run banks, which might be purchasing on behalf of the RBI.  

Thursday, July 13

The rupee ended the day weaker against the dollar at 44.71/7125 against its previous close of 44.6850/69.  Dollar buying by a few corporates and some large State run banks led the rupee to loose ground.  The rupee opened the day at 44.68/685 and immediately it was quoting weaker at 44.6925/70 before closing at 44.71/7125.  The heavy rains in Mumbai were also responsible to some extent for this.  Some dealers didn't turn up due to heavy rain in the city and there were a few participants in the market.  Dealers were of the view that the corporate demand seemed to be genuine import demand but the demand from the State run banks could have been on behalf of the RBI, which is looking to replenish its forex reserves.  Some dollar inflows came into the market at 44.71, which prevented the rupee to fall further.  In the forwards market, the six month forward premia ended the day higher at 3.48% against their previous close of 3.40% and the 12 month premia ended at 3.50% against their previous close of 3.43%.

Wednesday, July 12

The rupee ended the day slightly weaker amid thin trades and sustained dollar purchases by a State owned bank.  The rupee opened at 44.6775/6850 and closed at 44.685/69.  The heavy rains in Mumbai kept the trading and the volumes thin because most of the counters were deserted due to lack of staff.   Forward premia was quoting slightly lower at 3.40% against its previous close of 3.41%.  The major Asian markets also closed on a weaker note.  Dealers were of the view that these developments would not effect the rupee as it is not convertible on capital account yet.

Tuesday, July 11

The rupee ended the day at 44.675/68, marginally weaker than its previous close amid weak dollar inflows and little trades.  The rupee opened at 44.67/68 and traded in a narrow range throughout the day.  There were very few dollar inflows in the market, which were the remainder of the inflows and receivables that were left out yesterday.   The SEBI in its press release had confirmed that the foreign funds have been net sellers of $26 million in the equities market between July 1 and July 9.  This fact has put pressure on the rupee during the last month and this month also.  Three major foreign banks, Amex, Grindlays and the Deutsche bank sold dollars on Monday which helped rupee to strengthen by about 4 paise yesterday.

Monday, July 10

The Rupee ended the day sharply higher against the Greenback on huge Dollar sales and in the absence of any demand for the dollar from coporates and importers.  The rupee closed at 44.6650/6750 to a dollar on Monday, a 3 - 1/2 paise gains from the weekend levels.  It seems that the dollar supplies and receivables had accumulated over the weekend.  These dollars came to the market on Monday giving the rupee underlying support and propping it up.  On the other side, there was no demand from the corporates and the importers.  The SBI was not into action today which also kept most of the players away prompting banks to unwind long dollar positions.  Its actions generally sets the trend for the market.