USD/INR DAILY

Dollar fell by 16 paisa on Thursday and closed near day’s low even as equity indices failed to sustain higher levels and fell during later part of the day USDINR futures opened the day at 46.34 and closed at 46.18 as equity indices climbed to touch 5181 levels but gave up the gains soon after and closed at 5131 levels. The main event of the day was ECB’s interest rate meeting which was held in Frankfurt. Although the interest rates were kept unchanged, the Central Bank President Trichet announced the first steps towards scaling back emergency stimulus lending. ECB said it will charge a variable rate instead of afixed 1% for one year loan offered this month. Another important statement made by ECB President was the need for stronger dollar for benefit of Euro – area economy.  Dollar index rose after these comments and was quoting at 74.77 levels from 74.40 levels yesterday.In India bond yields continued to rise with 10 year benchmark yields quoting at 7.57% after inflation figures indicated rise in Primary Article Prices leading to speculation of government action in form of rise in interest rates For today one can expect a gap up opening for the USDINR pair . However 46.35 will be acting as a crucial resistance above which currency pair isexpected to touch 46.50 levels. On downside 46.00 will act as a crucial psychological support