Evening Report

The rupee extended its fall against the U.S. dollar as banks persistently bought the greenback to meet demand from importers in the absence of strong supply from exporters. Apart from dollar demand from importers, there were regular purchases from oil companies, which added to fall in the Indian unit. The dollar climbed for a third day before a government report that will probably show no slowdown in U.S. inflation, boosting speculation the Federal Reserve will stop cutting borrowing costs next month. The dollar also gained against the Euro after French Finance Minister Christine Lagarde said that the single currency is overvalued by as much as 20 percent. The yen fell as gains in stocks encouraged investors to buy higher- yielding assets in so-called carry trades. The British pound traded at $1.9393, the lowest since Feb. 20. Consumer-price growth will exceed the 3 percent level that requires a letter of explanation to be written to the government for ``several'' quarters, the central bank said in its quarterly inflation report today. The bank held its target lending rate at 5 percent on May 8. The Australian dollar fell for a second day after a government report showed wage growth unexpectedly slowed last quarter, increasing concern economic growth is easing.