EVENING REPORT -MAR 19

The Rupee strengthened past 51 against the dollar.RBI is back to buying back illiquid paper and concerns of supplies remain. India's most widely watched inflation measure, rose 0.44 percent.Inflation headed towards zero.U.S dollar was slaughtered after the Fed’s announcement that it would buy $300 billion in ling-term debt to help spur lending in an effort to stimulate the economy. . We have started to see dollar strength overnight, but given that the central bank intends to start printing money we may see continued weakness for some time. Additionally, the action send equity markets higher and the increase in risk appetite will also be a weighing factor on the dollar. The fundamental calendar could dampen optimism as initial jobless claims are expected to be above 600,000 which are expected to push continuing claims to 5.323 million. Indeed, U.S. stock futures are pointing toward a lower open which could lend greenback support. An expected improvement in activity on the Philadelphia area could be overshadowed by the leading indicator reading which is forecasted to decline by 0.6%. Regardless, the actions by the government should continue to impact price action over the near-term, which could spell continued dollar weakness.Euro continues to find support as it is back above the 1.3500 price level despite falling to an intraday low of 1.3415. The single currency was unfazed by German Chancellor Angela Merkel stating the Germany has done enough stimuli after passing through two packages worth 81 billion euros.Pound has started to consolidate at 1.4287 against the dollar. Sterling reached as high as 1.4337 on the Fed’s announcement that it was purchasing long-term assets. Although, we saw profit taking during Asian trading which sent the pound/dollar to an intraday low of 1.4158, it has found support on a higher public borrowing report. Britons increased their use of credit by 9.0 billion which was a complete reversal of January’s -2.68 billion. This could be a sign that consumer confidence is returning and we may see an increase in consumption which could help spur domestic growth. The jump in lending is a sign that markets are improving and the BoE’ ongoing quantitative easing policy should continue to help loosen credit markets. Indeed the central bank today said that it was reviewing its current dollar repo program as market conditions are improving. The efforts o the government should help bring an end to the worst housing crisis since the Great Depression which has been an albatross for the economy. yen appreciated due to the weakness in global economic conditions.Japanese exports continued to drop. Further, production is expected to continue its ongoing fall, but the pace of decrease is forecast to moderate gradually as adjustment pressures on inventories wane.The annual rate of increase in consumer prices slowed to zero, reflecting the declines in the prices of petroleum products and the stabilization of food prices. Bank of Japan maintained its economic assessment by saying that economic conditions have deteriorated significantly in Japan.