Rupee ends lower on patchy demand Spot Rupee ended lower on Thursday at 48.285/30 from its previous close of 48.27/28.The slight decline may be attributed to banks cashing in on the higher than usual cash to spot difference. US markets are closed on January 21st for Martin Luther King Day shifting the spot date to the 22nd. Moreover custodial banks acting on behalf of FII’s who have been net sellers of stocks in the last couple of days were seen buying Dollars towards the fag end of the day. The benchmark 6-month forward premium edged up to 6.06% on mild paying interest following Wednesday's sharp slide on expectations of CRR cut. Call money markets remained soft to close at 6.50% in spite of RBI ‘s auction of 750 million rupees The 30 stock BSE index closed 52 points higher at 3401 led by a tech rally. Dollar rises on cheering data Dollar continued its rally against major currencies lifted by the Jan. Philly Fed Business Index that came in at a robust 14.7 vs. prev reading of -12.6. US equities too rejoiced with Dow rising by 138 points and Nasdaq by 42 points. Dollar hit a high of 132.66 to the Yen also being supported by BoJ’s Jan report, which stated that the Japanese economy would continue to deteriorate. Euro dropped further dipping to 3-week lows of 87.90 cents hurt by the German GDP for 2001 that registered a disappointing 0.6% growth vs. prev. year’s 3% growth. Sterling slipped to a one month low of $1.4309 on release of Dec UK retail sales that fell 0.3% from the prev rise of 1.3%. However, sterling's fall against the dollar was limited due to its rise against the Euro and also on news that the UK's acquisition of a US power group would be financed by issue of shares as against the earlier expectations of cash payment. Dollar will trade cautiously ahead of the meeting of the US National Association of Manufacturers with the US Treasury at which the former is likely to object to the strong dollar policy.

Interbank Indian Rupee Markets Rupees per dollars Spot 1 Month 3 months 6 months 12 months Bank Sells at 48.3100 48.5489 49.0435 49.7618 51.1390 Bank Buys at 48.3000 48.5289 49.0241 49.7368 51.1190

FxForwards Percentages   1 Month 3 Months 6 Months 12 Months USD Libor 1.74 1.74 1.84 2.21 Forward Premium 5.81 6.03 5.98 5.85 Implied Deposit 7.55 7.77 7.82 8.06 Sovereign Zero Coupon 7.12 7.12 7.11 7.11 Arbitrage -0.43 -0.65 -0.71 -0.94

Source: Mecklai Financial Services

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