evening currency report

Rupee held firm above the key 40 per $1 mark as banks continued to sell dollars for exporters and foreign institutional investors following the rise in local shares.Rupee may even touch 39.75/$1. RBI may not intervene as it may result in higher inflation.The pound remained near its historical lows against the euro and was softer against the dollar after the release of data for the UK balance of payments and GDP.The current account deficit improved to 8.5 bln stg in the fourth quarter from a record of 19.1 bln stg in the third quarter and much better than the 18.5 bln. pound remained near the record low of 1.9960 level against the dollar, to which it has slumped from 2.0080 usd overnight due to soft economic data. The consumer confidence index from pollsters GfK/NOP fell another two points lowest in 15 years.The dollar rose against the majors as traders took profits on broad weakness in the U.S. currency before the end of the first quarter.The yen showed little reaction to news that Japan's core consumer inflation in February rose more than expected and scored the biggest increase in a decade.Australian dollar headed for a weekly advance on speculation growth in the two economies will accelerate.Australia's dollar is poised for a quarterly gain on optimism export earnings will increase as commodity prices rise.