Evening Report-sept 15.

Indian Rupee fell to a two-year low of 46 against the greenback in late morning deals owing to weak dollar overseas and a sharp fall in local stocks. The dollar was stung but has remained relatively strong given the nature of the events that have transpired, which could see the greenback look to erase some of its losses. However there still looms the issue of AIG, which has asked the Fed for a $40 billion bridge loan in an attempt to raise capital and prevent credit downgrades that would cripple the company. The overall impact of the events of Lehman Brothers and Merrill Lynch could lead to U.S. investors adding to the dollar weakness. An expected decline in Augusts’ industrial production of 0.3% will add to the dour economic picture for the U.S. following the unexpected drop in retail sales. Euro and Pound have given back some of their earlier gains as the BoE and ECB have taken measures to infuse liquidity into their economies. The Euro tested 1.4080 after reaching as high as 1.4479.In response to the failure of Lehman Brothers Fed has expanded the collateral it will accept for emergency loans to include equity as it attempts to minimize potential disruptions to the financial system. ECB and BoE also took measures to add liquidity .Yen continues to rally as risk aversion dominates the markets on the heels of the Lehman Brothers Bankruptcy and Merrill Lynch Purchase. A historic day in the financial markets that will change the landscape of the U.S. banking industry forever had sunk the dollar against most major currencies.