FORECAST: Call rates seen around 10 per cent levels on Thursday.

Spot dollar
The rupee continued its upward trend against the dollar and ended five paise stronger on Wednesday. Opening higher at 46.45/46 from its previous close of 46.4850/4950, rupee touched its intra-day high of 40.39 on heavy dollar supply and absence of follow-up demand. However, in the afternoon trades, some state-run banks seen buying dollar heavily, pulling the rupee down from its intra-day high. However, at close, rupee closed at 46.43/44 . The market witnessed good dollar inflows from domestic exporters as well as foreign funds, who are net buyers in the country's stocks markets. There were huge dollar inflows to the system today after the long week-end holidays in New York. Meanwhile, the RBI fixed its reference rate for dollar at 46.41 against its previous fix of 46.53. In cross-currency trades, rupee rose by 14 paise against the euro to 43.57 (43.71). However, rupee fell by five paise against the pound-sterling to 68.39 (68.34).

FORECAST: Rupee may hold steady on RBI intervention on Thursday.

Forward premiums
Forward premiums eased marginally on Wednesday. The six-month and one-year annualised premia ended lower at 4.46% and 4.53% respectively as compared to 4.51% and 4.60% of the previous day. "Forward premiums tracked the strong spot rupee and drifted lower on good receivings", a dealer with a forex dealership said. The rupee continued its firm trend against the dollar and ended five paise stronger on Wednesday. Rupee touched its intra-day high of 40.39 on heavy dollar supply and absence of follow-up demand.Cash/spot and cash/tom premiums ended at 1.00/1.10 paise and 0.50/0.50 paise respectively. "The possible increase in oil prices as Opec's is expected to announce a cut in the oil production will lead fluctuations in the forward segment", a dealer said. January dollar traded at 7.50/7.75 paise while in the far forwards, May dollar traded at 75.50/76.50 paise with June dollar quoted at 92.50/93.50 paise levels.

FORECAST: Forward premiums seen holding steady on Thursday.

Gilts
Bond prices gained by 10-15 paise on Wednesday. The 11.30% 2010 paper was seen at Rs 104.08 with the 11.43% 2015 and 11.40% 2008 at Rs 103.28 and Rs 105.06 respectively. "Gilt prices moved up as the market sentiment received a boost after the RBI deputy governor's remark about cash reserve ratio", said a I-Sec note. Call rates hovered around 10% levels and moved to its intra-day high at 10.10% in the morning on good demand for funds from banks. The RBI accepted 26 bids for Rs 2,685 crore in its reverse-repos auction at the cut off rate of ten per cent, while no bids were received in repos-auction as the call rates ruled well above the repo rate of eight per cent. On NSE's wholesale debt segment, trades worth Rs 2,097.80 crore were seen. Trades worth of Rs 330 crore were seen in the 11.30% 2010 while those in the 11.43% 2015 and 11.40% 2008 amounted to Rs 285 crore and 230 crore respectively.

FORECAST: Bond prices seen more or less steady on Thursday.

(Compiled by Atmadip Ray)