Monday, November 11, 2013
RBI Reference Rate
$/ €/ Last Closing
62.7315
84.0625
100.9224
63.9400
MTD (%)
-4.75%
-3.44%
-1.56%
-4.34%
YTD (%)
14.41%
15.98%
13.11%
1.15%
Pair
Finally currencies markets get some direction after
continued range bound trade, as many events
unfolded during the last week which set a positive
trend for the dollar, putting pressure on global
currencies. The slide in INR continued taking it close
to 62.5 spot, posting the worst week in 2-1/2
months, tracking a weaker euro after a surprise rate
cut by the ECB and as state-run oil refiners started
sourcing dollars in spot markets. Recent strong data
out of the U.S. has brought back the tapering talk.
With the year-end approaching, foreign investors
will also be averse to putting on risk-on trades.
The sentiment in the currency turned bearish on
concerns that sooner than later the RBI will
withdraw the special forex window for oil marketing
companies. This will compel the OMCs to return to
open market and as a result put pressure on the
rupee. Gold imports have gone down, exports have
shown an improvement and there is some saving in
the monthly balance of payments. S&P warned it
could downgrade India if the next government fails
to reverse the slide in GDP growth. On the global
front, we had the US third quarter GDP data, which
again beat all expectations as it jumped by 2.8%,
nonfarm payrolls data came out to be better than
expected. The ECB surprised the markets with an
unexpected rate cut to 0.25% which sent the euro
lower against the dollar.
£/ ¥/ On Shore
Pair
USDINR
EURINR
GBPINR
JPYINR
Contract
October
October
October
October
Open
61.4000
84.0575
99.2
62.8925
Close
61.63
84.2700
99.555
62.8450
1 Week Chg
0.23
0.2125
0.355
-0.0475
%change
0.37%
0.25%
0.36%
-0.08%
OI
461018
37920
16920
7430
OI change
5874
-3639
-1260
600
Pivot
61.5450
84.2108
99.4800
62.8317
Resistance
61.7800
84.3992
99.7600
62.9883
Support
61.3950
84.0817
99.2750
62.6883
EURUSD
GBPUSD
USDJPY
1.3361
1.6005
99.16
98.99
Off Shore
Open
Dollar
Index
81.2640
Pair
Close
81.2390
1.3358
1.6013
1 Week Chg
-0.025
-0.0003
0.0008
-0.17
%change
-0.03%
-0.02%
0.05%
-0.17%
Pivot
81.2617
1.3356
1.6009
99.05
Resistance
81.3133
1.3369
1.6026
99.18
Support
81.1873
1.3345
1.5997
98.85
This week in not a data heavy week and we expect
the dollar to retrace after the continued rally and
once against start to inch up before the weekend.
Please refer to the disclaimer at the end of the report.
Monday, November 11, 2013
USDINR:
INR continues to slide closing the week at the lowest point
at 62.48 depreciating by 74 paise. Expectations that the
RBI will shut down the oil swaps window has hit the
markets and led to the initial trigger. The dollar also got
support from the US GDP data which came to be better
than expected along Nonfarm payrolls data which once
again triggers the tapering buzz. The ECB’s sudden rate
cut by 0.25% crashed the euro strengthening the dollar
against most currency pairs. The yield on the 10-year
benchmark government bond 2023 ended at 8.99%,
compared with the previous close of 8.70%. Major trend
for the pair continues to look positive with immediate
support at 62.50. Immediate resistance is seen at 64.10
and sustainable trade above the same could take the pair
higher towards 64.60. However, a meaningful close below
62.50 could be a possible reversal trigger which could take
the pair lower towards 61.60. Broad range for the market
could be 62.50 – 64.60 for the next few weeks.
EURINR:
The EUR/USD continued to tumble after ECB
policymakers took markets by surprise by cutting
interest rates to a record low of 0.25% from 0.50%.
Data last week showed euro zone October inflation at a
four-year low 0.75, raising the specter of deflation that
could lead to falling prices, and declining wages and
output. ECB president Mario Draghi also said the bloc
“may experience a prolonged period of low inflation”,
which could have a severe impact on debt-addled
economies. Also during the week, the US GDP data
showed a sharp jump from 2% to 2.8% and nonfarm
payrolls data come to be better than expect which
triggered the tapering news once again lending support
to the dollar. EURUSD is currently trading close to
major support at 1.3280 after a drastic fall last week.
Against rupee the range is expected at 84.20 –
85.40, with a positive bias. However, daily close
below support at 84.20 could lead to a reversal
towards 83.15.
Please refer to the disclaimer at the end of the report.
Monday, November 11, 2013
GBPINR:
The GBP/USD ended at 1.60 flat remaining in a fairly tight
trading range for the week between a low of 1.5903 and
the high of 1.6118, with the central bank meeting on
Thursday holding rates and policy. UK PMI construction
and services PMI printed above expectations helping to
support the currency, but it was difficult against a growing
US dollar after a week of overall positive data with Friday’s
nonfarm payroll report printing well above forecast. The
coming week UK markets will focus upon whether that
country follows a global move toward lower inflation rates
when CPI lands on Tuesday. Also key may be the
unemployment rate on Wednesday. Without the inflation
downsides of other economies and as unemployment lies
within reach of the target, markets have rightly challenged
the credibility of the BoE’s promise and are apt to continue
doing so. GBPUSD is currently range bound. However, the
overall bias looks positive above strong support at 1.59.
GBPINR too continues to look positive with a test of major
resistance at 102.60 looking possible in the near term.
JPYINR:
The JPY ended the week at 99.00 against the USD,
remaining within a very tight range but closing at the top
of the range. The yen traded between 97.65 and 99.22
throughout the week. Midweek comments from the BoJ
showed dissention among member of the board, while at
the end of the week strong US data helped boost the US
dollar. Q3 Japanese GDP will help to advance the debate
further. Consensus expects a slower pace of annualized
growth equal to 1.6% which would be a much softer
print than either of the prior two quarters that averaged
growth of about 4%. USDJPY looks to be on the verge of
an upside break of resistance at 98.70 with immediate
support at 97.40. A test of next major resistance at
100.40 looks likely in the near-term. Meanwhile, JPYINR
is expected to remain in zone of 63.60-64.65 with an
upwards bias. However, breach of support could reverse
the trend to lead the pair lower towards 62.55.
Please refer to the disclaimer at the end of the report.
Monday, November 11, 2013
DATE
11-Nov
12-Nov
13-Nov
14-Nov
15-Nov
Economic Data
EVENT
India Trade balance(Could be released any time this week)
German CPI
UK CPI
India CPI
India Industrial Production
UK Claimant Count Change
Europe Industrial production
India M3 Money supply
BOE Inflation report
German GDP
ECB Monthly report
US Initial Jobless Claims
EU GDP QoQ
US Trade balance
India WPI
EU CPI
India FX Reserves
US Industrial Production
IMPACT
HIGH
MILD
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
For any details contact:
Currency Advisory Desk - +91 22 3958 3600
[email protected]
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