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Aug 18, 2015

Indian Currency Market A Weekly Perspective

RETAIL RESEARCH

USD/INR

ST Trend of US$

65.019

Up

Target

Reversal

Prev. Close

Supports

Resistances

65.80

63.64

63.730

65.06-64.95

65.45-65.80

07/08

14/08

% chg

63.730
69.866
98.684
1.946
1.096
124.197

65.019
72.255
101.697
1.909
1.111
124.276

2.02
3.42
3.05
-1.90
1.37
0.06

28236.39 28067.31
8564.60 8518.55

-0.60
-0.54

Currencies
Dollar (USD-INR)
Euro (EUR-INR)
Pound (GBP-INR)
Yen (INR JPY)
EUR-USD
USD JPY

Equities
Sensex
Nifty

Debt
3 mth T - Bill (%)
GS 7.72.2025

7.44
7.81

7.27
7.75

-2.28
-0.77

Source: Bloomberg & SEBI

The week gone by


The Indian Rupee lost last week. W-o-W, the USDINR pair gained 2.02%.

Foreign Markets
The dollar edged higher on Friday against a basket of currencies on encouraging data on U.S. producer prices and
industrial output, while euro ended a good week on a weak note even as the Greek parliament approved a new
bailout agreement.
Relative calm returned to foreign exchange market after China earlier last week sent ripples through global financial
markets by devaluing the yuan.
In July, U.S. producer prices increased for a third straight month, and industrial production rose at its strongest
pace in eight months, government data released on Friday showed. These improved figures were mitigated by a
surprise deterioration in U.S. consumer sentiment as measured by University of Michigan in early August. Still
Friday's economic readings kept in play bets the Fed will end its near zero interest rate policy by year-end.

RETAIL RESEARCH

U.S. interest rate futures suggested traders put a 45 percent chance the Federal Reserve will raise rates at its Sept.
16-17 meeting, up from 39 percent on Thursday, according to CME Group's Fed Watch program.
The euro rose earlier Friday as investors unwound euro-funded carry trades in the yuan and other emerging market
currencies, which were hit hard by the Chinese devaluation on Tuesday. It was also bolstered by the Greek
government's approval of a deal with creditors, which paves the way for disbursement of aid ahead of a debt
payment due this week.
On Friday, the People's Bank of China set the yuan midpoint at 6.3990 yuan to the dollar, slightly stronger than
Thursday. Beijing's moves eased concerns that a cheaper yuan could trigger a "currency war," or a competition
among the world's biggest economies to cheapen their own currencies to seek a competitive edge for their exports.

Outlook
Coming to the Indian Rupee, foreign flows will remain a key factor in the near-term for markets. Technically, the
USDINR pair remains in uptrend and could target the 65.8 levels in the coming week.

Upcoming Major Macro Events


Date

Country

Event

Bloomberg
Estimate

Previous Level

19-Aug-2015

USA

Consumer Price Index - M/M change

0.2%

0.3%

20-Aug-2015

USA

Jobless Claims

270k

274k

20-Aug-2015

India

CPI - Agricultural Labourers (YoY Chg)

4.46%

20-Aug-2015

India

CPI - Rural Labourers (YoY Chg)

4.7%

Top Traded USDINR Currency Options for the previous trading session (14-08-2015)
Option

No of Contracts traded

USDINR Call 65.5 Strike Price

2,53,533

USDINR Put 65.0 Strike Price

2,21,123

RBI Reference Rate:

Lst Close (14-08)


Daily % Chg
Weekly % Chg
Monthly % Chg

RETAIL RESEARCH

USD/INR

GBP/INR

EUR/INR

Yen/INR

65.123

101.617

72.560

52.350

0.31

0.18

0.42

0.36

2.06

2.72

4.17

2.39

2.56

3.48

4.06

1.69

The EUR/INR pair (Daily chart) Technical View

The week gone by saw the EURINR Rallying sharply before correcting from a high of 72.87. In the process, the pair
has reversed its short term downtrend and entered into a new uptrend.
Technical indicators are now giving positive signals as the pair trades above the 13-day SMA. Momentum readings
too are in rising mode and are not yet overbought. While the short term trend of the pair remains up, the pair could
move higher in the near term once the immediate resistances of 72.87 are crossed.

Analyst: Subash Gangadharan (subash.gangadharan@hdfcsec.com)

HDFC securities Limited, I Think Techno Campus, Building B, Alpha, Office Floor 8, Near Kanjurmarg Station, Opposite Crompton
Greaves, Kanjurmarg (East), Mumbai 400042, Fax: (022) 30753435
Disclaimer: This document has been prepared by HDFC securities Limited and is meant for sole use by the recipient and not for circulation. This document is
not to be reported or copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The
information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be relied upon as such. We
may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time solicit from, or perform investment
banking, or other services for, any company mentioned in this document. This report is intended for non- Institutional Clients only
This report has been prepared by the Retail Research team of HDFC Securities Ltd. The views, opinions, estimates, ratings, target price, entry prices and/or
other parameters mentioned in this document may or may not match or may be contrary with those of the other Research teams (Institutional, PCG) of HDFC
Securities Ltd.

RETAIL RESEARCH

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