currency evening report mar 27

Currency evening report
Rupee inched up as foreign banks continued to sell dollars. These seem like capital flows or some private equity inflow. Premiums were sharply up as importers bought forward dollars to rollover their contracts maturing March-end. However, the rupee faced tough resistance around 40.09-40.10/$1 on dollar purchases from state-run banks, presumably for the Reserve Bank of India. The dollar has started the European session strongly as investors book recent profits but remains vulnerable to falling back towards its all-time low against the Euro, especially with US economic growth data due for release later. Washington will announce the final fourth quarter US gross domestic product figures later today and consumer spending data for February . The dollar was also weighed down by the move by central banks in Asia and the Middle East to diversify their foreign exchange reserves by buying the common currency of the 15-member Euro zone area. The Euro has come under modest selling pressure against the dollar but confidence on the dollar remains weak .Elsewhere, the yen has weakened slightly against the dollar after Japanese officials aired some concerns about the outlook for the world's second-largest economy. Bank of Japan (BoJ) policy board member Miyako Suda warned of greater downside risk to the outlook of the Japanese economy in the year to March 2009 and stressed the need for managing monetary policy 'with a gradual approach'. The BoJ itself sees the growth potential rate for Japan at the upper end of 1.0 percent, lower than the IMF's prediction of 1.5 pct. Meanwhile, the pound has recovered some of yesterday's losses but remains vulnerable to further downside moves.
regards

priya & jayashree