Evening Report

India Rupee Down on dollar demand from foreign banks. Custodial banks are buying dollars. It could be for FIIs or importers. Rupee is unlikely to fall much as exporters may sell dollars. The dollar took back some ground early Wednesday, a day after the Euro rose to $1.60 for the first time ever. The dollar has been weighed down by a combination of gloomy U.S. economic data and high European inflation fueling expectations that the Fed will cut interest rates yet again, while the ECB will leave rates unchanged. The Euro was steady against the U.S. dollar after the release of mixed Euro zone PMI data, which showed a bigger-than-forecast drop in manufacturing activity, but an unexpected gain in services. pound rose after the minutes to the Bank of England Monetary Policy Committee meeting earlier this month revealed two votes to leave interest rates on hold. Japanese yen lost ground against most of its major counterparts .yen also dropped to a new multi-month low versus the Euro. Australian dollar climbed to the highest after a government report showed consumer prices rose at the fastest annual rate in seven years fueling speculation the central bank will resume raising interest rates.