Rupee recovers; Premiums firm After weakening in early trade to 46.66, rupee recouped its losses as bunched up dollar supplies emerged and closed at 46.62. However, forward premiums firmed up on sustained paying interest, despite an easing call, with the 6-month benchmark closing at 4.83%, up from 4.74%. Call rates eased as banks had met their reserve requirements ahead of the reporting day, today. Sensex extended its gains amid fund support and closed up 39 points at 3605 and FIIs stayed net buyers this month to the tune of $51.9 mn. Spot Dollar/Rupee is likely to remain rangebound ahead of a long weekend and dollar is likely to find support at lower levels. Euro rallies across the board Euro rebounded smartly from a low of $0.8785 yesterday to nail a one-week high of $0.8996 on hectic short covering. It also rallied to Y112.91 and to an 11-day high of 0.6270 GBP. However, on the economic front, euro-zone March economic sentiment index, dipped to 102.2 from a revised 102.8 in February while the Federation of German Banks' cut German GDP f/c for this year to below 2% from its recent estimate of 2.2%. The only solace for the Euro was February EU unemployment data that came slightly better at 8.7%. US stocks plummeted with Dow falling by 3% and the Nasdaq by 6% on continued corporate profit warnings. Sterling headed higher ahead of Bank of England MPC outcome tomorrow with a 25 bps cut in UK interest rates seemingly possible. Meanwhile, Dollar/Yen came in for profit taking amid overall dollar weakness and fell from a high of 126.80.

Interbank Indian Rupee Markets Rupees per dollars Spot 1 Month 3 months 6 months 12 months Bank Sells at 46.6400 46.9175 47.2050 47.7950 47.9000 Bank Buys at 46.6300 46.8775 47.1850 47.7725 47.8800

FxForwards Percentages   1 Month 3 Months 6 Months 12 Months USD Libor 5.06 4.85 4.66 4.62 Forward Premium 4.41 4.79 4.92 4.95 Implied Deposit 9.47 9.63 9.58 9.57 Sovereign Zero Coupon 9.57 9.42 9.27 9.19 Arbitrage 0.10 -0.21 -0.32 -0.38

Source: Mecklai Financial Services

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