USDINR MARKET UDPATE - Rupee posted its biggest daily gain in three years after the go vernment confirmed it will not impose retroactive taxes on foreign investors and as global risk asset rallied. Euro zone leaders agreed on Friday to take emergency action to bring down Italy's and Spain's spiralling borrowing costs and to create a single supervisory body for euro zone banks by the end of this year, a first step towards a European banking union. The improved global risk environment comes as investors are growing more hopeful of meaningful policy reforms at home after Prime Minister Manmohan Singh, a former centra bank governor, took charge of the finance ministry. The government released draft rules on Thursday and said the general anti avoidance rules, or GAAR, would not apply retroactively, a big concern for portfolio investors.

USDINR trading range for the day is 55.473-57.263.

Rupee posted its biggest daily gain in three years after government confirmed it will not impose retroactive taxes on foreign investors

One-month offshore non-deliverable forward contracts were quoted at 56.02.

SELL USDINR JULY BELOW 56.00 SL 56.20 TGT 55.82-55.65.

PROJECTION - Rupee posted its biggest daily gain in three years after the government confirmed it will not impose retroactive taxes on foreign investors and as global risk asset rallied.

EURINR MARKET UDPATE - EURINR yesterday traded with the negative node and settled -0.58% down at 70.56. Some pressure had been seen from the spot market also which closed at 1.2618 that is down by -0.32ps. In yesterday's trading session EURINR has touche the low of 70.49 after opening at 71.25, and finally settled at 70.56. For today's session market is looking to take suppor at 70.17, a break below could see a test of 69.78 and where as resistance is now likely to be seen at 71.27, a mov above could see prices testing 71.98. Spread between EURINR JULY & AUG contracts yesterday ended at 0.16, we hav seen yesterday that the EURINR market had traded with a negative node and settled -0.58% down. Spread yesterda traded in the range of 0.16 - 0.48.

EURINR trading range for the day is 69.78-71.98.

Euro ended higher after euro zone leaders agreed on measures to stabilize banks and reduce borrowing costs for Italy and Spain

EU leaders allow more flexibility in rescue funds

SELL EURINR JULY BELOW 70.48 SL 70.68 TGT 70.32-70.16.

PROJECTION - Euro remained on track for its biggest one-day gain in eight months after euro zone leaders agreed on measures to stabilize banks and reduce borrowing costs for Italy and Spain, but the rally looked set to be short-lived.

GBPINR MARKET UDPATE - GBPINR yesterday traded with the negative node and s ettled -1.35% down at 87.5425. Some pressure had been seen from the spot market also which closed at 1.5657 that is down by -0.31ps. In yesterday's trading session GBPINR has touched the low of 87.4325 after opening at 88.67, and finally settled at 87.5425. For today's session market is looking to take support at 87.06, a break below could see a test of 86.57 and where as resistance is now likely to be seen at 88.4, a move above could see prices testing 89.27. Spread between GBPINR JULY & AUG contracts yesterday ended at 0.25, we have seen yesterday that the GBPINR market had traded with a negative node and settled -1.35% down. Spread yesterday traded in the range of 0.25 - 0.4.

GBPINR trading range for the day is 86.57-89.266.

GBP rallied after European leaders agreed measures to cap weaker euro zone nations' borrowing costs

The BoE may announce more quantitative easing next week to prop up the UK economy

Demand for the safer dollar was also supported by signs of slowing growth in the United States and China.

SELL GBPUSD @ 1.5680 SL 1.5700 TGT 1.5640-1.5610.

PROJECTION - GBP rallied after European leaders agreed measures to cap weaker euro zone nations' borrowing costs, boosting demand for perceived riskier currencies.