Spot dollar
The rupee touched a life-time low of 46.7850/7900 on Friday on heavy demand for dollars from banks and corporates. Opening the day at 46.70/71 (46.64/66), the rupee eased in early trades. "The rupee had closed at 46.64/66 on Wedn-esday, and the market was biddish then... banks went extremely long on dollars in early trade in anticipation of good corporate dollar demand later in the day," a dealer said. "The rupee's fall to 46.7850/79 has been gentle and orderly, devoid of excessive speculation." Most dealers were of the view the fall must be seen in the light of the fact that the euro too has slipped to 0.8320 levels from 0.8500 thereabouts a week back. "I think the rupee will gain on Monday when delayed dollar inflow come in after the holidays", e-Mecklai's forex consultant N Subramanian said. At close, the rupee was seen at 46.74/75. Cash/spot was quoted at 1.10/1.20 paise with cash/tom and tom/spot at 0.80/0.85 paise and 0.30/0.40 paise.
FORECAST: Rupee seen at 46.65/70 on Monday.

Forward premiums
Forward premiums tracked the spot-rupee on Friday. The sixth-month and one-year annualised forward premia closed lower at 4.30% (4.34%) and 4.31% (4.37%). "Despite the fall in the spot-rupee to a life-time low of 46.7850/79), forward premiums drifted lower on scattered receivings by few state-run banks... ample liquidity with call rates settling at 8.50% and RBI maintaining its repo rate at 8% also helped forward premiums to ease", a dealer said. According to dealers, the market witnessed only moderate trading volume, and it was the curtailed dollar supply that pushed down the rupee and not the heavy demand. "As many corporates are having a long weekend, dollar-supply is very thin", a dealer said. November dollars quoted at 15/16 paise while in the far forwards April quoted at 99/100 paise with May at 114/115 paise.
FORECAST: Forwards seen quoting steady to lower on Monday.

Gilts
Bond prices rose on Wednesday. The 11.40% 2008 was traded at Rs 99.98 and the 12.50% 2004 at Rs 105.06. "Bond prices were depressed and showed signs of a further downward drift after the fall in the rupee", a dealer said, adding: "The fact that the RBI did not take any measure is another indicator that it is okay with the weakness in the rupee". Call rates quoted higher. Opening the day at 8.30-8.60% from its Wednesday's close at 8-8.10%, call rates inched higher on outflows after the auction of the 11.03% 2012 for Rs 3,000 crore. The RBI also sucked out Rs 5,270 crore through its repos. On the NSE's wholesale debt segment, trades worth Rs 911.36 were recorded. Deals worth Rs 260 crore were seen in the 11.03% 2012 at a weighted average yield of 11.70% while trades in the 11.30% 2010 amounted to Rs 220 crore (11.40%). Trades worth Rs 232.50 crore were recorded in the 11.40% 2008.
FORECAST: Bond prices seen gaining shade on Monday.

(Compiled by Raghu Mohan.)