Evening Report-Feb 10.

Rupee closes at 48.73 levels tracking a broad dollar rally overseas while a shaky stock market also weighed on sentiment. Indian Unit remained weak as banks bought dollars to meet demand from importers and noting the greenback's rise against major currencies. Currency moved in a narrow band as banks hardly took big positions in the market as dollar supply from banks matched demand from importers .Non-deliverable forward dollar/rupee rates were up noting the greenback's rise against other global currencies .U.S. session will be focusing on the upcoming testimony from U.S. Treasury Secretary and Fed Chairman in addition to the Senate voting on the fiscal stimulus plan. The Treasury Secretary is expected to outline the details of the spending of the remaining $350 billion TARP funds, which is expected to include the involvement of private firms to help buy the toxic assets. Meanwhile the Fed Chairman will give more details of the central banks efforts to loosen credit markets through off balance sheet maneuvers. The combined testimony may help ease current fears, which could restore recent risk appetite and weigh on the dollar. The Senate vote could be the main driver of price action if the government aide package is passed, which could lead to a demand for higher yielding assets and dollar weakness. Euro started to find support after its free fall on the back of speculation that European banks will take losses from Russian loans. There have been reports that Russian is expected to request postponement of some $400 billion in private sector debt. Meanwhile the fundamental data from the region continued to signal that the region would sink deeper into a recession as French and Italian industrial production contracted further. French activity fell to –1.8%. In Italy industrial production had fell 2.5% dragging the annualized decline to 14.3%.The troubles in Russia demonstrates that despite the fact that the Eastern European emerging markets aren’t part of the Euro-zone, there economies are ultimately tied to the region and their troubles can filter through to the developed nations. Therefore we may see the ECB need to lower interest rates further and take additional methods in order to avoid a deeper recession. Pound has given back some of its gains after it found resistance at 1.5000. The U.K. visible trade deficit narrowed more than expected to £7.37 bln . A 0.3% rise in exports may signal that the U.K. economy is finally starting to benefit from the Pound’s depreciation, which was forecasted by the BoE. This will strengthen the case for the central bank to keep interest rates on hold as the assess the impact of their past actions. USD/JPY remained rather steady consolidating at the highest levels despite poor corporate news in Japan and news about troubled Russian Banks.