The Indian rupee for the front month contract on NSE started the day breaching Rs. 46per US dollar, for the first time in almost two weeks on Thursday. The domestic currencystarted the day at around 46.07 after ending Wednesday at 45.96. Although rupee opened theday lower, it has been regaining slightly, currently trading at around 45.99 against theUS dollar. The local currency, seemingly headed for an intra day resistance at 46.09. Thekey level for the counter is 46.04. In the currency futures market, the most actively traded currency future contract on theNSE, USDINR January 2010 was at Rs 45.99 after closing on Wednesday at 45.96. The domesticcurrency lost 0.03 paise or 0.06% as compared to the previous close. Since the earlyhours, the contract registered a low of 46.17 and a high of 45.98. As per the data from CCIL, spot rupee was last trading at 45.98 against the US dollar at11.36AM IST as compared to 45.94 in the last trading session, losing 0.04 points or 0.09%. The US dollar surged to almost to a 5-month high against the euro on Thursday after strongChinese growth data, with the market cautious that strong data could mean further Chinesetightening steps. The dollar rally however seamed to be easing slightly. Meanwhile, the key benchmark indices continued to weaken in mid-morning trade as investorsturned cautious ahead of the earnings of key front line companies. Asian stocks weremostly lower as bullish economic data from China raised concerns Beijing may tightenpolicy. The BSE 30-share Sensex was down 66.07 points or 0.38%, up 37.94 points from theday's low and off 66.07 points from the day's high. The market breadth was weak as small and mid-cap stocks underwent correction after arecent solid surge. Meanwhile, the weekly inflation data for the week ended 09 January2010 is due for release later today, which will be watched keenly by traders to draw moreclues. The yield on most traded 10-year benchmark federal paper, 6.35% GS 2020, declined 3 bps inthe early trading to stand at 7.59% around 11.30 AM IST, compared to 7.62% at close onprevious trading session. Bond yields eased tracking fall in US treasury yields for thirdsequential session to touch one month's low level. US bond yields eased as data showed US housing starts fall, while wholesale pricesremained soft during December 2009. Further, ongoing worries over Greece's budget problemsled investors to offload risky assets and buy safe haven US government debt. Easing supplypressures, domestically also supported the sentiments. However, traders remain cautiousahead of third quarter review of monetary policy scheduled on 29 January 2010. Meanwhile, oil prices rose to near $78 a barrel in Asia after China, a top oil consumer,declared it has recovered from the global crisis, allaying concerns over its recentcrackdown on bank lending. Benchmark crude for March delivery added 21 cents to $77.95 abarrel in Asia electronic trading on the New York Mercantile Exchange. The Februarycontract expired Wednesday, ending down $1.40 at $77.62.

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