HSL PCG CURRENCY DAILY

21 October, 2016

PRIVATE CLIENT GROUP [PCG]

MAJOR CURRENCY VIEW POINT
Prev.
Close Chg. % Chg. RUPEE MAY START WEAK ON STRONGER DOLLAR
Close
The Indian rupee on Thursday weakened against the US dollar,
USDINR 66.810 66.678 0.133 0.20%
tracking the gain in US dollar. The rupee closed at 66.81 against the
DXY INDX 98.507 97.882 0.625 0.64% US dollar, down 0.2% from its previous close of 66.68. The home
EURUSD 1.090 1.0983 -0.009 -0.79% currency opened at 66.69 a dollar. The benchmark 10-year
GBPUSD 1.223 1.2263 -0.003 -0.24% government bond yield closed at 6.76% compared to Wednesday's
USDJPY 104.190 103.66 0.530 0.51% close of 6.732%.
DG USDINR 66.840 66.8181 0.022 0.03% RBI to purchase Rs. 100 billion of 7.28% 2019 bonds via OMO,
among 5 securities, on Oct. 25.
GLOBAL INDICES Borrowing in dollars to purchase rupee assets earned almost 3%
since the end of June, the highest carry returns in Asia after
Prev. Indonesia, data compiled by Bloomberg show
Close Chg. % Chg. Spot USDINR is having resistance around 67.07 while 66.50 acts as
Close
support in near term. The overall bias for the pair remains bearish
SGX NIFTY 8695.5 8707.0 -12 -0.13%
until it manages to cross 67.27.
NIFTY 8699.4 8659.1 40 0.47%
Dollar Climbs on Dovish Comment From ECBs Draghi
SENSEX 28129.8 27984.4 145 0.52%
The dollar rebounded sharply after two day consolidation to mark a
HANG-SENG 23374.4 23305.0 69 0.30% weekly gain against a basket of currencies, as the euro wallowed
NIKKEI 17286.2 17235.5 51 0.29% close to four-month lows after the European Central Bank quashed
SHANGHAI 3087.0 3084.5 2 0.08% any speculation of tapering its stimulus. The dollar index was up
S&P INDEX 2141.3 2144.3 -3 -0.14% 0.1% at 98.369, up 0.4% for the week and not far from its
DOW JONES 18162.4 18202.6 -40 -0.22% overnight high of 98.404, its loftiest peak since March 10. The euro
was slightly lower at $1.0925, poised to fell 0.4% for the week after
NASDAQ 5241.8 5246.4 -5 -0.09%
plumbing $1.0914 on Thursday. Earlier today, it drops to $1.0912,
FTSE 7026.9 7021.9 5 0.07% weakest Level since March.
CAC 4540.1 4520.3 20 0.44% The European Central Bank at its policy meeting yesterday kept its
DAX 10701.4 10645.7 56 0.52% quantitative easing program and interest rate policies unchanged.
However, Mario Draghi left the door open to a wide range of policy
INSTITUTIONAL ACTIVITY (Provisional Rs. In Cr)
options and emphasized that a long-awaited rise in inflation is
predicated on "very substantial" monetary accommodation - giving
Segment 20-Oct-16 19-Oct-16 markets no reason to believe the central bank was ready to talk
about tapering its 1.7 trillion euro ($1.86 trillion) asset-buying
Equity -295.94 373.88
program. Expect further discussion of these issues at the December
Debt -151.71 -132.66 meeting, where a fuller set of forecasts will be produced.
The probability that the Federal Open Market Committee will hike its
fed funds rate at the December 13-14 policy meeting is 68%, which
compares to 66% day before yesterday.

PRIVATE CLIENT GROUP [PCG]

TECHNICAL OUTLOOK

USDINR OCT. FUTURE DAILY CHART

Technical Observations
The USDINR Oct. Future is hovering around 20 SDMA.
Momentum Oscillators is placed at 57.96, above break even line of 50.
The pair is having resistance around 67.08, the falling trend line adjoining high 68.255 and low of 67.6975, and 67.22, the 200
SDMA.
The pair could witness short covering amid rebound in momentum oscillators. However, the outlook remains bearish till pair sustain
above 67.27 on closing basis.

PRIVATE CLIENT GROUP [PCG]

TECHNICAL LEVELS

Near Month Fut. Last Pivot S3 S2 S1 R1 R2 R3

USDINR 66.83 66.79 66.59 66.65 66.74 66.89 66.94 67.03
EURINR 73.47 73.38 73.00 73.10 73.28 73.56 73.66 73.84
GBPINR 82.05 82.03 81.72 81.81 81.93 82.14 82.24 82.36
JPYINR 64.46 64.42 64.19 64.25 64.36 64.53 64.59 64.70

Wkly Wkly 1-Mth. 1-Mth. 52 Wk 52 Wk

Spot 5 DMA 20 DMA 50 DMA 100 DMA 200 DMA
High Low High Low High Low

USDINR 66.96 66.53 67.14 66.40 68.79 64.77 66.76 66.68 66.80 67.00 67.07
EURINR 74.60 73.46 75.44 73.10 77.49 70.24 73.40 74.28 74.72 74.86 74.77
GBPINR 82.74 81.21 89.27 81.18 101.87 81.18 81.74 83.84 86.35 88.75 92.56
JPYINR 64.85 63.93 66.78 63.92 68.11 53.32 64.25 64.94 65.46 65.03 62.48

CURRENCY MOVEMENT

Open Chg. In
Currency Open High Low Close Chg. Chg. in OI Volume
Interest Volume
SPOT USDINR 66.69 66.83 66.69 66.81 0.13 -- -- -- --
USDINR OCT. FUT. 66.73 66.85 66.70 66.83 0.08 1306649 -41768 796032 -69015
SPOT EURINR 73.18 73.40 73.10 73.38 0.21 -- -- -- --
EURINR OCT. FUT. 73.28 73.47 73.19 73.47 0.12 27701 -1085 24872 -8533
SPOT GBPINR 82.00 82.03 81.81 81.98 0.07 -- -- -- --
GBPINR OCT. FUT. 82.10 82.12 81.91 82.05 -0.06 84433 2305 45249 -26811
SPOT JPYINR 64.38 64.44 64.29 64.36 -0.19 -- -- -- --
JPYINR OCT. FUT. 64.47 64.49 64.32 64.46 -0.13 23819 2225 24008 -11060

PRIVATE CLIENT GROUP [PCG]

 ECONOMIC EVENTS RELEASED

Date Time Country Event Period Survey Actual Prior

10/20/2016 13:30 EC ECB Current Account SA Aug -- 29.7b 21.0b
10/20/2016 17:15 EC ECB Main Refinancing Rate 20-Oct 0.00% 0.00% 0.00%
10/20/2016 17:15 EC ECB Deposit Facility Rate 20-Oct -0.40% -0.40% -0.40%
10/20/2016 17:15 EC ECB Marginal Lending Facility 20-Oct 0.25% 0.25% 0.25%
10/20/2016 17:15 EC ECB Asset Purchase Target Oct EU80b EU80b EU80b
10/20/2016 18:00 US Initial Jobless Claims 15-Oct 250k 260k 247k
10/20/2016 18:00 US Continuing Claims 8-Oct 2053k 2057k 2050k
10/20/2016 19:30 US Existing Home Sales Sep 5.35m 5.47m 5.30m
10/20/2016 19:30 US Leading Index Sep 0.20% 0.20% -0.20%

ECONOMIC EVENTS TODAY

Date Time Country Event Period Survey Prior

10/21/2016 14:00 UK Public Sector Net Borrowing Sep 8.2b 10.1b
10/21/2016 19:30 EC Consumer Confidence Oct A -8 -8.2

PRIVATE CLIENT GROUP [PCG]

 Technical Analyst: Vinay Rajani ([email protected])
Currency Analyst: Dilip Parmar([email protected])

HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042
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Phone: (079)66070168, Website: www.hdfcsec.com Email: [email protected]

Disclosure:

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PRIVATE CLIENT GROUP [PCG]