Rupee recovers losses The rupee closed on a firmer note on Friday after touching a new low during the early part of the week .While most of the volatility during the week can be attributed to inter bank trades ,many exporters also cancelled forward contracts booked earlier. Importers on the other hand did not panic and proffered to wait and watch developments in the market. The rupee closed at 48.84 with a gain of 3 paise over its previous close .Banks were seen liquidating their long USD positions in absence of corporate demand and strong inflows in the market . The central bank is however expected to step in to prevent any major appreciation in the value of the rupee in order to maintain the competitiveness of Indian exports. Forward premia ended mostly unchanged with the benchmark six month forward closing at 5.78%. Call rates ended higher at 6.15% against the previous close of 6%, with good demand seen on the reporting Friday. Dollar slips on unemployment data The dollar weakened across the board on the release of weaker than expected US unemployment data . Unemployment rose to 5.7% in March against 5.5 % in the previous month. The figures also dampened market expectations of a hike in US interest rates after the next meeting of the Fed on May 7. The Euro rose to 0.8812 but ended below the 88 cents level after the release of the German industrial production figures for February , which reflected a decline of 1% against an expected rise of 1.1%. The yen rose to a two week high of 131.34 on short covering by traders as expected Japanese investment outflows failed to materialise . The Japanese government too, was comfortable with the current strength of the yen , with the Japanese finance minister commenting that there was no need for any government action in response to any further gains or depreciation in the value of the yen. Cable ended at 1.4315, off its high of 1.4374 but continues to be strong on expectations of an interest rate hike by the Bank of England and positive economic data.

Interbank Indian Rupee Markets Rupees per dollars Spot 1 Month 3 months 6 months 12 months Bank Sells at 48.8425 49.0758 49.5692 50.2719 51.3850 Bank Buys at 48.8400 49.0683 49.5617 50.2594 51.3725

FxForwards Percentages   1 Month 3 Months 6 Months 12 Months USD Libor 1.87 2.01 2.30 2.94 Forward Premium 5.67 5.93 5.83 5.20 Implied Deposit 7.54 7.94 8.13 8.14 Sovereign Zero Coupon 6.25 6.25 6.25 6.26 Arbitrage -1.29 -1.69 -1.88 -1.88

Source: Mecklai Financial Services

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