Evening report aug 08

The Rupee weakened as oil prices held close to $120 per barrel after rebounding from three-month lows in the previous session raising worries of higher trade deficit. The dollar was supported by a surprise increase in the US June pending home sales report. The dollar rallied on as the European Central Bank's caution on its growth outlook shifted the focus of economic concerns from the United States to the rest of the world. The Euro slumped to a five-month low against the dollar .In economic news, the Italian Gross Domestic Product declined 0.3% sequentially in the second quarter compared with 0.5% growth in the first quarter, a preliminary report from the statistical office ISTAT revealed. Yen traded at 109.70 levels for the day. Sterling tumbled to its lowest in more than a year against the dollar , dropped sharply overnight in to below $1.93 after the Bank of England's decision to keep rates at 5pc prompted more traders to expect that the Bank will eventually cut rates.