EVENING REPORT-SEP 02.

Rupee was also dragged to near 20-month low of 44.56 as some banks bought dollars to avail of the arbitrage in the non-deliverable forward market. Currency witnessed demand from foreign institutional investors despite the rise in local share market .But Indian unit trimmed losses as government-owned banks sold dollars and closed at 44.42 levels. U.S. Dollar extended its rally to fresh 2008 highs against a basket of currencies as oil's startling fall toward $105 a barrel boosted expectations of lower global inflation and non-U.S. interest rates. ISM Manufacturing activity is expected to hold at the borderline reading of 50.0.US consumers continue to grapple with higher living costs amid fading labor demands which may limit economic activity .Euro fell to its lowest in seven months against the rampant greenback below $1.4480 level. Euro-Zone producer prices peaked to a new record high, but did little to help the Euro recover .All eyes will be on ECB President Jean-Claude Trichet speech, with a probability of keeping rates on hold at 4.25 percent. sterling's dismal run continued and it fell to fresh historical lows testing 1.7785 levels. Compounding an increasingly bleak UK economic outlook. Japanese yen ticks up against most majors and tested around 108.80 levels for the day. Australia's central bank cut rates by a quarter percentage to 7 percent, helping to drive the Australian dollar down sharply to its lowest in a year.