In the inter-bank dealings, the rupee somehow managed to minimise its losses to 17 paisa in relation dollar for buying and selling at 87.60 and 87.65. The feature of the week was that the dollar hit a new high at Rs 89 in the open market after panic buying of dollars by both importers and investors. It was noticed that many investors shifted their position from gold to dollar buying, which pushed up the dollar versus rupee.
Another major factor was the rising demand for dollars, which widened the gap between open and inter-market rates, as under uncertainty the world over kept the investors in the grip of fear about the future of business in the coming days.
INTER-BANK MARKET: On Monday, the rupee gained 10 paisa in relation to dollar for buying at 87.67 and 11 paisa for selling at 87.72. On Tuesday, the rupee dropped 4 paisa against dollar for buying and selling at 87.71 and 87.76.
On Wednesday, the rupee-dollar rates remained unchanged for buying and selling at 87.71 and 87.76. On Thursday, the rupee gained 23 paisa in terms of dollar for buying at 87.48 and 24 paisa for selling at 87.52. On Friday, the rupee fell 3 paisa against dollar for buying at 87.51 and 4 paisa for selling at 87.56. On Saturday, the rupee lost 9 paisa versus dollar for buying and selling at 87.60 and 87.65.
OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, euro got off to a rocky start, with its weakness gathering pace after a series of political setbacks in Europe over the weekend prompted a flight to safety. It lost about 1 percent on the day to $1.3666 and fell 0.7 percent to 105.12 yen as investors reacted badly to an unproductive European Union meeting in Poland.
The cancellation of a visit by Greek Prime Minister George Papandreou to the United States to chair an emergency meeting and a regional election defeat for Germany's Chancellor Angela Merkel added fuel to the already tense euro.
Inter bank buy/sell rates for taka against dollar on Monday were 74.92-75.15 (previous 75.09-75.10) and Call Money Rates: 6.50-10.00 percent (previous 5.00-9.50 percent).
The yuan closed slightly lower against dollar after the central bank set the mid-point a bit weaker, in line with a strengthening in the US currency, continuing a stall against dollar that started at the beginning of this month.
In the second Asian trade, euro slid sharply, closer to a seven-month low against dollar after Standard and Poor's cut its debt rating on Italy and as investors fret over whether Greece can borrow badly needed cash from international lenders. These worries encouraged investors to exit a range of riskier assets, with the growth-linked Australian dollar briefly hitting a one-month low and emerging economy currencies such as the Brazilian real coming under heavy pressure.
The single European currency hit a session low of $1.3599 after the Italy news, but trimmed some losses as traders came to terms with the rating cut.
The yuan fell slightly against dollar in offshore forwards market on Tuesday after a rally in the US Dollar Index pushed the People's Bank of China to set a weaker yuan/dollar mid-point, traders said.
Benchmark one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.3435 in late trade, up slightly from Monday's close of 6.3420. The dollar was trading versus Indian rupee at Rs 47.80, and at 3.1305 against Malaysian ringgit.
In the fourth Asian trade, dollar climbed to a seven-month high against major currencies after the Federal Reserve said there were "significant downside risks" for US economy, but it stopped short of bold monetary easing, instead shifting its portfolio in favour of long-term debt.
Although few analysts expected the Fed to embark on another round of quantitative easing, the central bank's reluctance to expand its balance sheet prompted sharp falls in shares, commodities and risk-related currencies such as euro and Australian dollar.
As investors viewed the Fed's move as a drop in the ocean and called it insufficient to spur a sustained economic recovery, they shifted aggressively into the liquid US dollar. As a result, currencies of emerging economies such as Brazil's real and South Africa's rand sustained their biggest daily losses since the global financial crisis of 2008. Both have nose-dived nearly 20 percent so far this month.
Dollar was trading against Indian rupee at Rs 48.99, at 3.1570 versus Malaysian ringgit, and at 6.3889 in terms Chinese yuan. In the fifth Asian trade, euro rose on profit-taking on Friday, but its gains could prove fleeting after market players were unimpressed by a G20 pledge to preserve financial stability. It climbed by as much as 0.8 percent earlier after Jiji news agency reported that Group of 20 officials were working toward an emergency statement, stirring hopes for action to soothe jitters over the euro zone's debt crisis.
The communique, however, contained no surprises, and market players said they were sceptical that euro, or risk currencies like Australian dollar, would enjoy a sustained bounce.
The Chinese renminbi fell sharply against dollar in offshore market with investors bailing from what had been one of their most surefire bets on currency appreciation following a big sell-off in Asian currencies this week.
At the week-end, euro rebounded against US dollar after falling by the most in 10 months, a trend traders say should persist until Europe does more to solve its debt crisis.
The euro's slide highlighted one of the more tumultuous weeks on record for world markets as fear of a Greek debt default and the Federal Reserve's gloomy prognosis for the US economy spurred massive demand for dollars and safe-haven Treasury debt.
The yuan, or renminbi, dropped sharply on Friday in the offshore market, shedding nearly 2 percent and was heading for its biggest weekly decline. The offshore dollar/yuan forwards now imply a 1.33 percent depreciation in a year's time, a complete turnaround from just a week ago.
But these dramatic moves are more a result of position liquidation and adjustments as skittish investors rush to take profits where they can to cover losses elsewhere or simply to preserve capital, traders said.
OPEN MARKET RATES: On September 19, the rupee picked 20 paisa versus US currency for buying and selling at 88.40 and 88.60. The rupee also gained Rs 1.42 in terms of euro for buying and selling at Rs 120.44 and Rs and Rs 120.94.
On September 20, the rupee was unchanged in terms of US currency for buying and selling at 88.40 and 88.60, while it fell 66 paisa versus euro for buying and selling at Rs 121.10 and Rs 121.60.
On September 21, the rupee was unchanged in terms of US currency for buying and selling at 88.40 and 88.60, while it lost 14 paisa versus euro for buying and selling at Rs 121.24 and Rs 121.74.
On September 22, the rupee lost 50 paisa in relation to US currency for buying and selling at 88.90 and 89.10. The rupee, however, gained sharply by Rs 1.85 for buying and selling at Rs 119.39 and Rs 119.89.
On September 23, the rupee lost 20 paisa against dollar for buying and selling at 89.10 and 89.30. The rupee also shed 53 paisa in terms of euro for buying and selling at Rs 119.92 and Rs 120.42.
On September 24, the rupee shed 10 against dollar for buying and selling at 89.20 and 89.40. The rupee also lost 81 paisa in terms of euro for buying and selling at Rs 120.73 and Rs 121.23.