Rupee up versus euro on UK’s decision to leave EU

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Observer Report

Karachi—After Britain’s decision to leave the European Union, the weakening rupee gained Rs2.60 on the buying counter and Rs1.90 on the selling counter, hitting almost a month high against the euro at Rs116.50 and Rs118.00 respectively.
Earlier the rupee traded weak against the dollar and euro. There was a slight pressure on the rupee in the interbank dealings as well as open market due to sustained demand for the dollar from importers amid foreign fund outflows. Besides, a weak opening in the domestic equity market also weighed on the local currency although at the same time weakness in the dollar against major world currencies in the global market in the week’s early sessions limited the rupee fall.
On the interbank market, the rupee commenced the week in minus as it continued weekend downslide. The rupee closed the week in minus after extending its overnight weakness against the dollar for the third straight day. Against the dollar it shed six paisas on the buying counter and five paisas on the selling counter, hitting a fresh one-month low at Rs104.83 and Rs104.84 in the last trading session, resulting in 11 paisas loss in the last three sessions. During the week, the dollar on the interbank market managed to gain nine paisas on the buying counter and eight paisas on the selling counter against the rupee on week on week basis.
In the open market, the rupee/dollar parity moved in line with the interbank market. The rupee turned negative against the dollar in the week’s opening session and posted 10 paisas loss at Rs104.90 and Rs105.10 in the first trading session. The rupee/dollar parity closed the week flat at Rs105.10 and Rs105.30 as it did not show any change for the third consecutive day. In international trade, however, the dollar rose against world currencies after sterling pared losses against the dollar, plunging 10pc to its weakest in 31 years following Britain’s decision to leave the European Union. During the week in review, however, the rupee in the open market lost 30 paisas against the dollar on week on week basis. Against euro, the rupee continued the previous weekend downslide for the second straight week.

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