Spot dollar
The rupee was on pressure on Monday. Opening weaker at 46.446/48 from its last close of 46.4550/4650, the rupee continued to its weak trend on steady dollar demand from the corporates and importers. "There was poor demand from state-run banks and importers in the face of higher dollar inflow from local operators", a dealer said. The intra-day low was 46.48/4850. At close, rupee was seen at at 46.48/4850, down by two paise from its previous close. "Bank took long dollar position in the morning session in anticipation of heavy dollar demand from corporates and importers later in the day", a banker noted. Meanwhile, the RBI fixed its reference rate for dollar at 46.48 against its previous fix of 46.43. In cross-currency trades, the rupee closed 39 paise lower against the pound-sterling at 67.47 (67.08) and 25 paise lower against the euro at 43.10 (42.85).
FORECAST: Rupee seen more or less steady on Tuesday.

Forward premiums
Forward premiums moved down on Monday. The six-month annualised premium closed a bit higher at 4.41%, while the one-year annualised premium closed also higher at 4.46%, as compared to 4.30% and 4.35% respectively of the previous day. Despite the weak spot-rupee, the premiums dropped by 1-2 paise. The premiums continued to move down on scatter receivings. Rupee remained weak against the dollar as there were high demands for dollar, and the rupee ended at 46.4550/46. Cash/spot and cash/tom finished at 0.90/92 paise and 0.42/44 paise respectively. "The market players are expecting a cut in the cash reserve ratio after the Fed rate-cut, and that will ease the premiums further", a dealer with a forex dealership noted. In monthwise premiums, February dollar traded at 6.5/7.0 paise while in far forwards, June dollar traded at 76/77 paise with July dollar at 92/93 paise.
FORECAST: Forward premiums seen steady on Tuesday.

Gilts
Bond prices remained more or less steady on Monday. "Government securities continued its firm trend on sustained buying support on the back of easy liquidity and easy call rates", a dealer said. The benchmark 11.30% 2010 paper seen at Rs 106.78, while the 12.40% 2013 and 11.40% 2008 seen at Rs 111.55 and Rs 107.40 respectively. "The market sentiment was bullish as there is a possiblity of interest rate-cut", a dealer said. The RBI accepted one bid for Rs 4,000 crore in its repos-auction at the cut-off rate of 8%, while it did not receive any application for its reverse-repo auction. On the NSE's wholesale debt segment, trades worth Rs 3,298.73 crore were seen. Trades worth Rs 698 crore were seen at 11.30% 2010 paper, while those in the 12.40% 2013 and 11.40% 2008 traded at Rs 403 crore and 300 crore respectively.
FORECAST: Bond prices seen steady on Tuesday.

(Compiled by Atmadip Ray)