FORECAST: Call rates seen remaining steady on Wednesday.

Spot dollar
The rupee was on pressure against the dollar on Tuesday. The pressure was due to persistent dollar demand from corporates and importers with thin supplies from the foreign funds. "Foreign currency inflow was low in the first week of February, and that led the rupee to loss further ground", a dealer said. Foreign and state-run banks were both biding the dollar consistently during intra-day trades. Market players expect the rupee to remain under pressure in the next few days as demand for dollar will continue. Meanwhile, the RBI fixed its reference rate at 46.55 per dollar, as against its previous fix of 46.48. In cross-currency trades, the rupee closed 22 paise against the pound-sterling at 67.69 (67.47) and three paise weaker against the euro at 43.13 (42.10). The rupee also closed 26 paise weaker against the yen at 39.74 (39.48).

FORECAST: Rupee seen at 46.55/60 on steady dollar demand on Wednesday.

Forward premiums
Forward premiums moved down further on Tuesday. The benchmark six-month annualised premium closed a bit lower at 4.39% (4.41%) with the one-year annualised premium closed steady at 4.46%. "Forward premiums moved up in the morning session after tracking the high call rates and the weak spot-rupee. However premiums fell later after some state-run banks were seen selling forward dollar contracts", a dealer said. Call rates stayed in the range of 8.75% and 9.00% at the inter-bank call market. In the forex market, steady dollar demand from corporates and importers continued to exert pressure on the rupee. At close, the rupee was seen at 46.55/56. Cash/spot and cash/tom ended at 0.95/1.00 paise and 0.45/50 paise respectively. In month wise premiums, February dollar traded at 7/7.25 paise while in far forwards, June dollar traded at 76/77 paise with July dollar at 93/94 paise.

FORECAST: Forward premiums seen steady on Wednesday.

Gilts
Bond prices remained more or less steady on Tuesday. "Prices of bonds held steady in a narrow ten paise range" a dealer with a primary dealership said. The benchmark 11.30% 2010 paper seen at Rs 106.73, while the 11.03% 2012 and 11.40% 2008 seen at Rs 104.56 and Rs 107.45 respectively. Secondary market for securities was lacklustre in tight range-bound trades with market players still speculating over a interest rate cut by the central bank. The RBI accepted one bid for Rs 3,000 crore in its repos-auction at the cut-off rate of 8%, while it accepted one bid for its reverse-repo auction. On the NSE's wholesale debt segment, trades worth Rs 2,377.21 crore were seen. Trades worth Rs 455 crore were seen at 11.30% 2010 paper, while those in the 11.03% 2012 and 11.40% 2008 traded at Rs 315 crore and 255.32 crore respectively.

FORECAST: Bond prices seen rangebound on Wednesday.

(Compiled by Atmadip Ray)