Evening Report-Mar 16.

The Rupee closed at 51.41/42 per dollar supported by gains in the local share market and a weaker dollar overseas. A pick up n risk appetite in Asian and European trading sessions has led to dollar weakness. U.S. futures are pointing toward a higher open which could lead to continued dollar bearish sentiment. Net Long-term TIC flows are expected to have increased to 45.0 billion from 34.8 billion which could spark bullish sentiment as it will demonstrate the continued appetite for dollar denominated assets. Additionally, industrial production in the U.S. is forecasted to have fallen by another 1.3% following a 1.8% decline in January. The drop in activity will push out expectations for a U.S. recovery and could weigh on equity markets adding potential greenback support. Yet, Fed Chairman’s Ben Bernanke’s prediction in his 60 minutes interview last night that the recession will end by 2010 may overshadow the data releases and sustain support for U.S. equities. Another potential negative dollar factor could be the increasing speculation that the Fed will start to increase money supply after the success in the U.K.. Dollar tumbled to its lowest level in almost 5-weeks against the Euro as reduced concerns over the financial sector lessened demand for the safety of the US currency.Price pressure in the Euro-Zone increased 0.4% in February, which raised the headline reading to1.2% from a 10-year low of 1.1% in January, while the core rate of inflation, which excludes volatile items such as food and energy, accelerated to 1.7% from 1.6 in the previous month. Meanwhile, a separate report showed that the labor market in the euro-region contracted at a record pace in the fourth quarter as employment slipped another 0.3% during the three-months through December after dropping 0.1% in the third quarter, which lower the annual rate to 0.0% from a revised reading of 0.6%. Despite the minor uptick in inflation, price growth in the Euro-Zone remains well below the 2% target held by the ECB, and as the central bank holds a dour outlook for growth and inflation, policy makers are likely to employ all of their available tools in an effort to soften the landing of the economy.British pound is likely to face increased selling pressure as BoE’s successful purchase of Gilts has helped lower borrowing cost and is expected to help spur lending to business and consumers. Expect more initiates to be forthcoming as Prime Minister Gordon Brown pledged that the recent G-20 meeting will produce results including global regulation to ensure the recent problems don’t repeat themselves. Meanwhile, Rightmove Home prices remained near record low levels as they increased 0.9% in March which signals that the housing market is far from recovering which could limit bullish sentiment. Greenback strengthened to 98.51 against YEN But the dollar-yen pair bounced between 97.99 and 98.43 during early European deals. Financial markets also look ahead to the Federal Reserve and the Bank of Japan policy meetings this week