US dollar overseas Weakens

Symbol	Expiry	Open	High	Low	Close	Chg	% Chg	Volume	OI
USDINR	24-Feb-2011	46.0225	46.1000	45.9350	45.9725	-0.16	-0.3522	3,014,914	643,801
EURINR	24-Feb-2011	63.0500	63.2500	63.0025	63.2025	0.28	0.4530	84,125	39,797
GBPINR	24-Feb-2011	73.5025	74.1300	73.5025	73.9650	0.71	0.9796	30,772	18,536
JPYINR	24-Feb-2011	56.3525	56.8100	56.0950	56.3100	0.25	0.4504	5,553	14,233

The US dollar fell v/s the Indian rupee yesterday tracking decline in the US dollar in the overseas market. Weakness in the local stock market failed to push the USDINR higher as the former has been falling against majors such as Euro, GBP and CHF. The spot USDINR closed the day at 45.7575, down by almost 15 paisa since the Monday’s closing. The Feb future contract closed down 16 paisa 45.972.

In cross pairs, the Euro and the GBP rallied against the Indian rupee following rise in the majors. The EURINR for Feb expiry closed the day firm at 63.20, up 28 paisa. The pair posted an intraday high of 63.25. The GBPINR Feb contract crossed the 74.00 mark in the intraday trading, closed few paisa below the level. The Yen gained further against the India rupee with the Feb JPYINR contract closed at 56.31, up 25 paisa.

Local stocks and Debt market

The bear onslaught continues on Dalal Street, with the BSE Sensex and the NSE Nifty falling for the fifth successive trading session. Also, the Sensex briefly fell below 18,000 in intraday day trading, which was for the first time since Aug. 31, 2010. At the close, the benchmark 30-share index, BSE Sensex lost 305.54 points or 1.67% at 18,022.22 with 27 components registering drop. Meanwhile, the broad based NSE Nifty went down by 88.70 points or 1.61% at 5,417.20 with 49 components posting drop.

Indian govt bond yield rose marginally yesterday for second consecutive day of the week. The most-traded 8.13% 2022 bond ended lower at INR99.61, compared with INR99.72 at its previous close

Global market

The US dollar continued to fall further against major currencies on Tuesday on hopes of further economic recovery. U.S. benchmarks the Dow and S&P 500 closed at their highest levels since June 2008 and looked poised for further gains as corporate earnings continue to surprise on the upside. The strong corporate picture and signs of an improving economy eased investors' fears about possible economic fallout from the political turmoil in Egypt, where President Hosni Mubarak announced he will not seek re-election in September after more than 1 million people gathered peacefully across the country to demand that he step down. The Euro rose towards 1.3850 v/s the US dollar and GBP rose towards 1.62 levels. The yen gained with the USDJPY dropped to 81.28 yesterday.

Market Outlook

USDINR Feb: The market is expected to open lower tracking weakness in the US dollar in the overseas market. The Feb contract is expected to take support at 45.75 levels and below that pressure can be extended. Resistance is seen at 45.98 levels. Selling is recommended on pullback.

EURINR Feb: The pair is expected to open higher on firm EURUSD while a weak USDINR will limit gains. The pair is expected to hold on to gains as long as rates sustains above the 63.25 levels. Rates are expected to test 63-65-63.70 today. Buy on dips

GBPINR Feb: The pound may see consolidation against the Indian rupee. Buying at the top does not seem ideal as of now. Watch out to buy GBPINR at the support of 73.55-73.60. Resistance is seen at 74.20-74.25 levels

Economic data for the day

Currency	Event	GMT	CONSENSUS	PREVIOUS
GBP	GBP Purchasing Manager Index Construction	09:30	49.50	49.10
EUR	EUR Euro-Zone Producer Price Index (MoM)	10:00	0.70%	0.30%
EUR	EUR Euro-Zone Producer Price Index (YoY)	10:00	5.20%	4.50%
USD	USD ADP Employment Change	13:15	150K	297K