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Monday, June 27, 2016

Currency Daily Report

Monday, November 07, 2016

CONTENTS

Market Overview

Daily Analysis with fundamental and technical outlook

US Dollar

Indian Rupee

Euro

Sterling Pound

Japanese Yen

Important events for the day

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MARKET HIGHLIGHTS (% change) as on 4-Nov-16

INDICES LAST CHANGE WOW MOM

NIFTY 8456.0 -0.34 -2.1 -2.9

SENSEX 27381.7 -0.18 -2.0 -2.6

DJIA 17930.7 -0.16 -1.3 -1.7

S&P 2085.2 -0.2 1.0 1.2

FTSE 6693.3 -1.4 -61.7 -5.3

KOSPI 1983.8 0.1 -2.0 -3.4

BOVESPA 58497.8 0.2 -8.3 -3.5

NIKKEI 16905.4 16.8 -0.1 -0.7

Source: Reuters

COMMODITY HIGHLIGHTS (% change) as on 4-Nov-16

INDICES LAST CHANGE WOW MOM

NYMEX CRUDE - $/BBL 44.66 0.0 -8.3 -11.5

COMEX GOLD - $/OZ 1296.70 -0.4 1.7 3.1

COMEX SILVER - $/OZ 18.66 1.5 6.0 7.7

LME COPPER (3M) -$/TONNE 4944.00 -0.3 2.1 -17.3

Source: Reuters

CURRENCY HIGHLIGHTS (% change) as on 4-Nov-16

CURRENCY LAST CHANGE WOW MOM

DX 97.31 0.11 -1.05 0.6

USDINR 66.72 -0.09 0.08 0.0

EURUSD 1.1102 -0.01 1.08 -0.4

GBPUSD 1.2452 -0.06 2.2 -1.3

USDJPY 103.3 0.32 -1.3 -0.6

Source: Reuters

Technical Chart – USDINR

Source: Reuters

Daily INR= 10-10-2016 - 03-11-2016 (GMT)

Cndl, INR=, 03-11-2016, 66.7683, 66.7879, 66.6399, 66.7450,

-0.0065, (-0.01%)

Price

/USD

66.5

66.6

66.7

66.8

66.9

66.7450

10 17 24 31October 2016 Nov 16

MARKET OVERVIEW

Asian markets are trading positive owing to clearance of potential

criminal charges by the Federal Bureau of Investigation against

the presidential candidate Hillary Clinton for using her private

email server. This has boosted the chance of Clinton’s victory in

tomorrow’s elections.

US DOLLAR INDEX (USD)

The US Dollar Index traded lower by more than 1 percent in the

last week. Reason behind the weakness could be attributed to the

disappointing release of economic datasets from the nation along

with the rising fears of US Presidential Elections. Both ADP and

Non-Farm Employment change came on a weaker note. Non-

Manufacturing PMI plunged to 54.8 levels from 57.1 in Oct’16.

Factory Orders and Prelim Unit Labor Costs declined by 0.3

percent in Oct’16.

Moreover, the prospect of a December’16 rate hike indication

from the Federal Reserve in Nov’16 policy meet went unnoticed;

all thanks to the upcoming US Presidential Elections. News that

the FBI planned to reopen investigations into Hillary Clinton email

debacle kept the markets in jitters as world markets expected a

Clinton victory at the polls next week.

US Dollar Index made a weekly low of 96.94 and closed at 97.09

levels on Friday.

INDIAN RUPEE (USDINR) The Indian Rupee depreciated by 0.08 percent in the last week

owing to persistent buying of the greenback by importers and

banks. Sensex and Nifty ended in red tracking losses in Asian,

American and European markets as investors remain cautious

ahead of the US Presidential Elections. Sentiment remained

downbeat due to sustained selling by foreign funds and retail

investors on the domestic bourses which affected the INR.

For the month of November 2016, FII outflows in equities totaled

at Rs. 1504.42 crores ($225.07 million) as on 4th November’16.

Year to date basis, net capital inflows stood at Rs. 45482.30 crores

($6835.26 million) as on 4th

November’16.

Indian Rupee made a weekly low of 66.79 and closed at 66.79

levels on Friday.

OUTLOOK

USDINR is likely to appreciate tracking gains in Asian market

equities after the FBI dropped charges against Democrat Hillary

Clinton thereby boosting the chance of Clinton’s victory in

tomorrow’s elections.

Technical Outlook valid for 7-Nov-16

Currency Futures Trend S1 S2 R1 R2

USDINR Nov’16 (NSE) Sideways 66.75 66.60 67.05 67.15




EURO (EURUSD)

Euro currency traded higher by 1.08 percent in the last week; all

thanks to the lower DX in the overseas markets. Moreover, robust

release of economic datasets from the Euro area has also infused

positive sentiments in the markets thereby boosting the demand

for the shared currency. Health of the Spanish manufacturing

sector improved at a stronger rate during October’16 amid faster

rises in output and new orders. Moreover, there has been modest

growth in economy of the 19-country Euro-zone in the third

quarter despite BREXIT concerns.

Not only this, even inflation rate of Euro-zone came better than

the forecast. It hit a more than two-year high of 0.5 percent in

October’16 as prices for goods and services rose a tad faster. Even

the manufacturing and service sector of Euro-zone’s two

powerhouses i.e. Germany and France increased to more than

forecasted levels. Moreover, weakness in the DX added to Euro’s

strength.

OUTLOOK

EURINR is expected to trade lower a slack of important economic

datasets form the nation will keep the trading volumes a bit light.

Moreover, tomorrow’s US Presidential elections will prompt the

traders to play safe which will keep the shared currency a bit

pressurized.



EURINR Nov’16 (NSE) Sideways 74.00 73.70 74.50 74.70

STERLING POUND (GBPUSD)

Sterling pound traded higher by 2 percent in the last week as

markets discounted the release of BOE monetary policy. The

policymakers kept the bank rate at 0.25 percent and expect impact

of Sterling on inflation to be temporary and offsetting it fully with

higher rates would be too costly. The committee also said that

weaker Sterling reflected market view that UK's future trade with

EU may be less open than expected.

Moreover, there was a discussion in the High Court yesterday

about allowing the government to trigger Article 50 without

consulting Parliament which turned down. The High Court has

ruled in a landmark decision by not giving the power to the

government to trigger Article 50 without a parliamentary vote.

OUTLOOK

Sterling Pound is expected to trade lower as recent strength in the

currency will prompt the traders to book profits.



GBPINR Nov’16 (NSE) Sideways 83.30 82.90 83.90 84.20

Technical Chart – EURINR

Source: Reuters

French Flash Manufacturing PMI surged to 51.3 in

Oct’16 from previous months 49.7.

German Flash Manufacturing PMI surged to 55.1 in


German Ifo Business Climate surged to 110.5 in


Spanish Unemployment Rate declined to 18.9

percent in Oct’16 from previous months 20 percent.

Technical Chart – GBP/INR

Source: Reuters

Prelim GDP for quarter ending September’16 surge

more than the forecasted levels by 0.3 percent.

Daily EURINR= 13-10-2016 - 03-11-2016 (GMT)

Cndl, EURINR=,

03-11-2016, 74.1100, 74.1600, 73.8700, 73.9200,

-0.2300, (-0.31%)

Price

INR

72.4

72.8

73.2

73.6

7473.9200

13 14 17 18 19 20 21 24 25 26 27 28 31 01 02 03October 2016 Nov 16

Daily GBPINR=R 11-10-2016 - 03-11-2016 (GMT)

Cndl, GBPINR=R, 03-11-2016, 82.104, 83.098, 82.078, 82.770,

+0.686, (+0.84%)

Price

INR

81

81.5

82

82.5

82.770

11 12 13 14 17 18 19 20 21 24 25 26 27 28 31 01 02 03October 2016 Nov 16




JAPANESE YEN (JPY/USD) Japanese Yen appreciated by 1 percent in the last week after the

Federal Bureau of Investigation started examining more emails in

an inquiry into Hillary Clinton's use of a private server which

prompted the traders to play safe and move towards safe-haven

assets like Japanese Yen.

After this event a new poll from ABC/Washington Post showed

Republican candidate Donald Trump leading the US presidential

race. The possibility of a victory for Republican Party nominee

Donald Trump in next week’s US Presidential election has kept

the global markets in jitters.

OUTLOOK

JPYINR is likely to appreciate as weak DX along with the rising

fears of US Presidential Elections will keep the market sentiment

a bit negative thereby boosting the demand for safe-haven Yen.



JPYINR Nov’16 (NSE) Sideways 64.80 64.60 65.30 65.60

Technical Chart – JPY/INR

Source: Reuters

Household Spending declined by 2.1 percent in

September’16 from previous month’s fall of 4.6

percent.

Inflation rate declined by 0.4 percent in

September’16 from previous months -0.5 percent.

Daily JPYINR=R 06-10-2016 - 01-11-2016 (GMT)

Cndl, JPYINR=R,

01-11-2016, 63.5974, 63.7055, 63.4255, 63.5899,

-0.0075, (-0.01%)

Price

INR

63.2

63.6

64

64.4

63.5899

06 07 10 11 12 13 14 17 18 19 20 21 24 25 26 27 28 31 01October 2016

Economic indicators to be released on 7-Nov-16

INDICATOR COUNTRY TIME (IST) ACTUAL FORECAST PREVIOUS IMPACT

German Factory Orders m/m Euro 12:30pm - 0.2% 1.0% Medium

Halifax HPI m/m UK 2:00pm - 0.3% 0.1% Medium

Eurogroup Meetings Euro All Day - - - Medium




Research Team

Heena Imtiaz Naik

Research Associate

Currency

[email protected]

(022) 2921 2000 Extn :6104

Prathamesh Mallya

Chief Analyst

Non-agri Commodity & Currency

[email protected]

(022) 3935 8134 Extn :6134

Harsh Rawat

Technical Analyst-Currency

[email protected]

(022) 3935 8141 Extn: 6141

Kaynat Chainwala

Research Analyst

[email protected]

(022) 3935 8136 Extn :6136

Thank You

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