Rupee steady – is it the lull before the storm? Rupee ended the week at 46.5350/54 on Friday after trading the whole week in a tight range of 46.48 – 46.56. Having opened at 46.5150/52 a little firmer than its previous close, the domestic currency did not fall much as it derived adequate support from FIIs’ who were on buying spree. However, BSE plunged to its lowest level for the year at 3882 down 175 points on Friday. How long the faltering market would attract FIIs with its falling prices, is still to be seen. Those with dollar liability should exercise caution. Forward premia moved up in tandem with call, and the benchmark 6 months moved up and closed at 4.29%. Dollar boosted by healthy US employment figures The measures of Japan's ruling party to cut various taxes extended little support to Yen. In European trading, Euro was up against sterling as German industrial production soared 0.9% in January while UK industrial production was unchanged. US non-farm payrolls surged by an unexpected 135,000 against the forecast of 62000. This coupled with a marginal increase in US hourly earning, pushed the dollar up against euro to 0.9290. However, the dollar lost some ground after a free-fall in US stocks with the Nasdaq falling close to 6%. In early Tokyo trading today, the Yen shrugged off a strong Q4 GDP number and hit a fresh 20 mth low of 120.61 as Japanese P.M Yoshiro Mori denied his intention to resign and also as Nikkei lost close to 3%.

Interbank Indian Rupee Markets Rupees per dollars Spot 1 Month 3 months 6 months 12 months Bank Sells at 46.5475 46.8000 47.0300 47.5625 47.8075 Bank Buys at 46.5425 46.7675 47.0075 47.5375 47.7925

FxForwards Percentages   1 Month 3 Months 6 Months 12 Months USD Libor 5.19 5.04 4.91 4.86 Forward Premium 3.80 4.07 4.32 4.31 Implied Deposit 8.99 9.11 9.23 9.17 Sovereign Zero Coupon 8.02 8.33 8.56 8.73 Arbitrage -0.96 -0.78 -0.67 -0.44

Source: Mecklai Financial Services

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