SPOT DOLLAR
The rupee held rocksteady against the dollar on Friday. Opening the day at 43.39/3950, a shade lower from its overnight close of 43.38/39, the rupee moved in a fine 2-3 paise band throughout the day. "Demand for dollars was almost non-existent. Most of the trades were inter-bank, and the amounts were small", a dealer with a European bank said. The rupee had gained by three paise on Thursday to 43.38/39 on the back of bunched-up export receivables and other dollar inflows after Tuesday's Diwali holidays. Dull trades saw the rupee close at its opening levels after going briefly quoting at an intra-day low of 43.4050. "The rupee went lower to 43.4050 with a few foreign banks buying dollars. But by noon, adequate dollar supply saw the rupee recover", a dealer said. Cash/tom was quoted at 1.50/1.75 paise, cash/spot at 1/1.25 paise with tom/spot at 0.25/0.3750 paise (1/1.25 paise).
FORECAST: Rupee seen holding 43.40/4025 levels on Monday.

FORWARD PREMIUMS
Premiums continued went higher on Friday, but finished nearer to their overnight finish. The six-month annualised premium ended at 4.84 per cent as compared with Monday's 4.78 per cent. "There were a few export cancellations and forward premiums inched up. Liquidity is actually quite comfortable," a dealer said. January dollars ended unchanged at 41/42 while in the far terms, April at 94/95 paise (93/95 paise). "The market is squarish. Payout of Rs 3,500 crore after Thursday's auction of the 15-year dated-stock affected call rates which quoted a shade higher at 8.50 per cent levels, but this had little impact on forward premiums", a dealer said. Dollar inflow continue to be good. Figures released by Sebi put net foreign institutional purchases on the bourses since November 1 at $171 million. Of these, $168 million was in equities with the rest in debt.
FORECAST: Six-month annualised forward premium seen at 4.75 per cent levels on Monday.

GILTS
Bond prices held steady on Friday. "They (bond prices) moved up in intra-day trades by two-three paise, but came off by close on profit-booking", dealer with a primary dealership said. The 12.32 per cent 2011 was seen at Rs 104.12; 11.90 per cent 2007 at Rs 103.41; 11.99 per cent 2009 at Rs 103.10; and the 12.40 per cent 2013 at Rs 104.25. The Centre's 15-year bond auction for a notified amount of Rs 3,500 crore maturing in 2014 held on Thursday was oversubscribed by Rs 5,242.35 crore. Payout of Rs 3,500 crore after Thursday's auction of the 15-year dated-stock had no affect on the bond-market despite the higher call rates at above 8.50 per cent levels. "Most of the trades today were in longer-dated stock... The Reserve Bank cut-off yield on the 15-year paper at 11.83 per cent, 5-6 basis points lower than the market expectation is an indicator that bond-prices will be firm in the near-term", a bond dealer said.
FORECAST: Bond prices seen holding current levels on Saturday.