Rupee slips in late trade Spot rupee weakened by three paise in late trade on the back of good dollar demand from an oil undertaking and foreign banks to close at 46.9850/9950. Spot opened unchanged at 46.9550/9650 and appreciated a tad to 46.9475 before weekend dollar supplies were absorbed by importer demand. Concern over the rising oil prices also prompted some short covering by interbank players. Call closed on a soft note at 7.00% amid thin demand after opening firm at 7.90%. Forwards too closed softer amid speculation of an interest rate cut in the near future. The 6-month fwd closed at 4.98% on annualized terms compared to Friday’s close of 5.12%. The BSE Sensex pottered around in a narrow range before closing 13 points higher at 3509. Dollar rules firm A contraction of the Japanese second quarter GDP by 0.2% coupled with reports of the Euro zone falling short of its projected annual GDP of 2.0%-2.5%, gave the markets a further excuse to buy the dollar. USD/JPY hit a high of 122.05 before closing just off the highs. The Euro was dumped to a low of $0.8408 before it managed to claw its way back to the mid 84 cents level. Cable initially rallied as high as 1.3877 but succumbed later to fall to a fresh 15-1/2 year low of 1.3710. The US dollar was also buoyed by an optimistic BIS report on the state of its economy. The Dow shed 55 points and the Nasdaq 44 points on earnings downgrades by a couple of investment banks.

Interbank Indian Rupee Markets Rupees per dollars Spot 1 Month 3 months 6 months 12 months Bank Sells at 47.0300 47.2278 47.6081 48.2087 49.3653 Bank Buys at 47.0200 47.2078 47.5881 48.1813 49.3453

FxForwards Percentages   1 Month 3 Months 6 Months 12 Months USD Libor 4.00 3.91 3.91 4.14 Forward Premium 4.92 4.87 4.98 4.96 Implied Deposit 8.92 8.78 8.88 9.10 Sovereign Zero Coupon 8.57 8.59 8.62 8.65 Arbitrage -0.35 -0.19 -0.27 -0.45

Source: Mecklai Financial Services

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