Rupee recovers on strong dollar inflows from FIIs The rupee opened on a weaker note at 46.8350, and touched an intra-day low of 46.8550 against the dollar on short covering by banks. However, strong dollar sales by exporters and custodial banks on behalf of FIIs helped rupee to recover at the end to close at 46.8250.The forward premiums softened on statement by Finance Minister, which was interpreted by the market as a signal for further lowering of interest rates by the central bank. Expectations of rate cut pushed the 6-month benchmark premium to 4.84% as compared to its previous close of 5.01%. The spot dollar is likely to move in narrow range as both demand and supply are seen to be adequately matched. Majors tread in narrow ranges ahead of crucial US employment figures Crosses remained range bound ahead of the crucial U.S. employment figures to be released later today. Euro fell from a six-day high of 89.77 cents to a low of 88.79 cents against the dollar following weaker euro-zone business and consumer confidence data, which slipped to 102.1 in April from 102.3 in March. It however bounced back to 89.66 cents but ran out of steam and settled lower.Yen appreciated sharply to a six week high of 120.71 against the dollar before shedding its gains on speculative short covering and reestablishment of long dollar positions. The Japanese unit remains thinly traded as Japan is still on with its Golden Week holidays. Pound sterling maintains a supportive tone and is comfortably trading in 1.43-1.44 range.

Interbank Indian Rupee Markets Rupees per dollars Spot 1 Month 3 months 6 months 12 months Bank Sells at 46.8350 47.0339 47.3937 47.9781 49.1415 Bank Buys at 46.8270 47.0141 47.3707 47.9551 49.1170

FxForwards Percentages   1 Month 3 Months 6 Months 12 Months USD Libor 4.38 4.30 4.25 4.40 Forward Premium 4.95 4.71 4.85 4.91 Implied Deposit 9.33 9.01 9.10 9.31 Sovereign Zero Coupon 9.11 9.05 9.06 9.09 Arbitrage -0.22 0.05 -0.04 -0.22

Source: Mecklai Financial Services

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