EVENING REPORT

The Rupee at 48.54/56 per dollar, from the previous close of 48.80/81, after inflation data came in below market expectations and the broad dollar weakness against major currencies overseas improved sentiment for the local unit. The dollar headed for its first weekly loss against the yen in three weeks before a U.S. payrolls report that may show the economy lost jobs every month in 2008 and the unemployment rate rose to a 16-year high. Retail spending in Germany rose 0.7% in November, slightly better than the economists’ forecast of 0.5% gain. However, the October reading revised down to -2.2% from -1.6% initially, suggesting that the consumption still far from recovery. With the unemployment starting to rise in December, the private consumption may remain subdued over the following months as Europe’s largest economy faces its worst recession in decades, which could lead the European Central Bank to lower borrowing costs next week. Amid the releases, the Euro declined against other major currencies. The U.K. pound headed for its biggest weekly advance against the euro since the common currency’s debut in 1999 as the Bank of England slowed the pace of interest-rate cuts. The UK PPI for December and the industrial production report for November were released . Amid the release, the pound gained slightly against other major currencies. Yen reversed the previous gains and remained mixed.