Rupee in a tight range The rupee ended at 48.895 against the dollar on Friday, with little movement seen during the day. Good dollar supplies from exporters and subdued demand for dollars kept the rupee in a 48.89-94 band. The Middle East crisis and its impact on oil prices will be an important factor affecting sentiment for the rupee during the week . The political developments at home would also be keenly watched by the markets. Forward premia closed higher on concerns over liquidity in the markets. The benchmark six month forward premium closed at 6.13% compared to the previous close of 5.97%. Near term premia continue to rule higher than the far forwards with the three month premium at 6.23% and the one year forward at 5.45%. Dollar unscathed despite poor data The dollar managed to remain unscathed in spite of the release of disappointing economic figures on Friday. March retail sales remained unchanged at 0.2% m/m while March PPI shot up to 1% from 0.2% previously, registering its largest rise in 15 months. The rise in energy costs was the main factor behind the rise in the PPI. Another disappointment for the dollar was the drop in the University of Michigan survey to 94.4 in April from the previous 95.7. The euro recovered its early losses ,climbing to 0.8791 after touching a low of 0.8778 with disappointing German retail sales data offsetting a rebound in French industrial production. EU officials continue to be positive on prospects of economic growth in the region with inflation likely to be contained close to the 2 % level. Cable moved in line with the euro and the UK budget , due to presented this week, will guide the sentiment for the currency .The yen initially rallied against the dollar on the release of the economic data but could not hold on to its gains , ending close to the 132 level. Recent remarks by Japanese officials hinting at the desirability of a weaker yen have kept the currency under pressure and it is widely expected to weaken further.

Interbank Indian Rupee Markets Rupees per dollars Spot 1 Month 3 months 6 months 12 months Bank Sells at 48.9300 49.1853 49.7091 50.4665 51.6398 Bank Buys at 48.9200 49.1665 49.6812 50.4406 51.6148

FxForwards Percentages   1 Month 3 Months 6 Months 12 Months USD Libor 1.86 1.98 2.23 2.82 Forward Premium 6.15 6.30 6.25 5.52 Implied Deposit 8.01 8.28 8.48 8.35 Sovereign Zero Coupon 6.49 6.43 6.38 6.35 Arbitrage -1.52 -1.85 -2.10 -2.00

Source: Mecklai Financial Services

For archives of the above analysis, please click here.

A Forex service by eMecklai.com for NRIOL.com visitors. All rights reserved worldwide. Questions or comments on this service, please contact: forex@nriol.com