Rupee ends steady Spot rupee closed virtually unchanged from Friday’s closing levels at 46.8150/82 amid subdued trading. The Indian unit climbed to a high of 46.78 in early trade as banks sold dollars anticipating adequate supplies from FII and exporters. Importer buying interest at these levels curtailed further gains and a late round of short covering saw the dollar recover its losses. Call was comfortable around the 7.00%-7.30% levels despite a bond auction, amid ample liquidity. Premia traded with a steady bias with the benchmark 6-month forward closing at 4.86% annualized as compared to Friday’s 4.84%. The BSE Sensex climbed to a high of 3637 with gains in old economy stocks before profit taking towards the close saw it pare its gains. The index closed 4 points up at 3587. Yen rallies, Euro falters The strong showing of the supposedly pro-reform Koizumi in the Japanese prime ministerial elections buoyed the Yen. USD/JPY fell to a low of 121.12 and closed just above the lows while EUR/YEN dropped to 108.77. The Euro also faltered against the dollar following comments from Duisenberg hinting that a rate cut might not happen in the near future. Earlier, German industry called for an easing in interest rates following a sharp fall in business confidence to 93.9. But Italian April inflation came in at 3.1% compounding the ECB’s dilemma. The Australian dollar crashed to a low of $0.5040 from $0.5203 after the government rejected Shell’s bid for a local oil company. The Nasdaq dropped 104 points to 2059 following downgrades of key tech companies while the Dow closed 48 points down at 10532.

Interbank Indian Rupee Markets Rupees per dollars Spot 1 Month 3 months 6 months 12 months Bank Sells at 46.8600 47.0534 47.4002 48.0100 49.2533 Bank Buys at 46.8550 47.0337 47.3760 47.9950 49.2283

FxForwards Percentages   1 Month 3 Months 6 Months 12 Months USD Libor 4.51 4.38 4.28 4.36 Forward Premium 4.76 4.53 4.89 5.09 Implied Deposit 9.27 8.91 9.17 9.45 Sovereign Zero Coupon 9.18 9.24 9.23 9.24 Arbitrage -0.09 0.33 0.06 -0.21

Source: Mecklai Financial Services

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