Evening report- aug 04.

Rupee weakened and closed at 42.48 levels on raised concerns of higher oil prices aud widening trade deficit to record levels , losses in the local share market also weighing on sentiment.U.S. dollar was softer ahead of interest rate decisions in the US and Europe, as central banks wrestle with the twin threats of weak economic growth and rising inflation.EURUSD traded in a narrow range amid Stagflation pressures which continue to mount in the Euro-Zone, as factory prices gained 8 percent in June. Amid high living costs, manufacturers passed additional costs onto consumers. Producer prices increased by the most in 18 years, bringing the ECB’s dilemma over how to balance growing inflation and downside growth into focus. The ECB council is expected to "do in the future what is appropriate to deliver price stability." Sterling continued it’s downward decent as the prospects of a rate hike from the BoE have all but vanished.Housing market deterioration is accelerating as tight credit markets have left borrowers on the sideline while the glut of inventory continues to pile up.The central bank is expected to keep their benchmark rate on hold despite the expectations that inflation will rise above 4%Japanese yen weakened to 4-day lows against the majors and tested 108.07..AUDUSD traded in green and tested 0.9340 Amid the RBA benchmark interest rate speculation. Australian house prices fell for the first time in three years as home buyers stayed out of the market. The falling house prices support RBA Govenor Glenn Steven’s view that the economy will slow enough to cool inflationary pressures