USD/INR DAILY

DOLLAR
Dollar continued to be volatile taking Cues from equity markets as no specific trend seems to be in place in either of them. Dollar futures opened the day at 47.16, around 10 paisa positive from previous close and made a high 47.30 after which the trend reversed as the pair closed the day in red at 47.06. Nifty which fell by 90 points from open recovered and closed the day 54 points positive at 4765 points, a rise of 140 points from the low. In international currency markets, dollar index stayed sideways quoting at 75.73 in early morning session. In yesterdays central banks meeting of BoE (Bank of England) and ECB (European Central Bank) the interest rates were kept unchanged at 0.50% and 1.00% respectively. However Bank of England announced to boost its bond purchase program by 200 billion pound against general expectation of 225 billion pounds. ECB President Trichet also stated that some of the emergency liquidity measures introduced to fight recession will be withdrawn. In domestic news, bond yields stayed flat at 7.26% as lackluster movement was witnessed in bonds markets. For today we expect USDINR to open gap down with 46.85 acting as a crucial support level. One can look for selling on bounce till afternoon in the pair.