Currencies Daily Report

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1 Currencies Daily Report Powered by Karvy Forex & Currencies Pvt. Ltd. Wednesday 20 Sep 2017 Market Overview Financial stocks lead the rally in U.S. stock indices to log record closing yesterday, ahead of the FED s concluding statement from its two-day policy meeting. The US Federal Reserve is expected to hold the interest rates but the focus would be on its plans to unwind the $4.5 trillion balance sheet and hints of timing as well as pace of further rate hikes. Indian Rupee has closed at 2 month s low against US dollar at 64.33, as markets focus on the FOMC meeting this evening. The USD-INR pair is opened at and is expected to trade in a range of on the higher side and on the lowerwith a bullish bias. Japan's exports rose 10.4 percent by volume in August from a year ago, following a 2.6 percent annual increase in July. A pickup in shipments of cars, car parts, and semiconductor manufacturing equipment increased Japan's year-on-year exports to the United States in August by 21.8 percent versus an 11.5 percent annual increase in the previous month. Booming shipments of cars and electronics in August drove up Japan's exports at the fastest pace in nearly four years, further evidence that overseas demand is strong enough to support healthy economic growth. The 18.1 percent annual increase in exports was the fastest since November 2013 and handily beat the median estimate for a 14.7 percent annual rise seen in a Reuter s poll. August's export result was well up on July's 13.4 percent, and marked a ninth straight month of expansion. Export growth is seen likely to continue as the global economy remains on a solid footing, which should underpin policymakers' confidence in Japan's economic outlook. The Bank of Japan is expected to keep monetary policy on hold at a meeting ending on Thursday as inflation remains confusingly low despite data pointing to solid economic growth. Indices Last Close Previous Close % CHANGE NASDAQ 6, , DOW JONES NIKKEI HANGSENG Currencies Today Morning Yesterday at 05:00 PM % CHANGE DXY EURUSD GBPUSD USDJPY Today Morning Yesterday at 05:00 PM 0.04 % CHANGE USDINR Spot IRF

2 USDINR Intraday Outlook Indian Rupee has closed at 2 months low against US dollar in last trading session. There were no major economic publications from Indian economy in the last session which has resulted in weaker Rupee against US dollar in yesterday s trade but the reason for Rupee weakening was due the investors focus on FOMC meeting which is scheduled tonight. While looking at US dollar against majors, it is currently quoting at after being topped at on Monday, despite the stronger data from US where the Building permits in August was reported at 1.300Mn against an expectations of 1.220M. Whereas the Housing start rose to 1.180Mn against an expectations of 1.175Mn. While the Export and Import Price Index figures ticked up. The only piece on negative data was the US Q2 Current Accounts which was reported at Bn v/s Bn estimates. Though the data was most positive we have the Dollar edging down slightly, as the investors hold on their nerves ahead of the fed s policy meeting later this evening where the US federal reserve is expected to keep the interest rates unchanged at 1.25%. Though there is nothing much expected from the policy front the key focus would be the fed plans on reducing its $4.5 trillion Balance sheet. Recollecting recent FOMC statement as well as comments from FOMC members most of them have hinted that the fed is likely to announce its plans for trimming its balance sheet in its September policy meet and now the markets expect fed to announce the plan in today s policy meeting. And also remarks from Fed s Chair Yellen will be under lime light if she would talk about pace as well as timing of further rate hikes. side. Markets would likely to hear if the fed chair will show confidence in strength of US economy where the wage growth, employment as well as spending was weaker. Thought the recent inflation figures were printed better, markets would likely watch if Yellen will remain hawkish on the inflation even considering economic impacts of Hurricane Harvey and Irma. Coming to USD-INR, expect the pair to trade in between This is the daily chart of USDINR, the pair has traded in the range of on the higher side and 64.13on the lower side,the pair had a trending session after a long consolidation and had a bullish candle which closed above the 50DMA placed at now likely to act as a strong support and with prices breaking above and closing above 50DMA expects momentum to continue on the higher side. Bullish-Sideways BUY USDINR FUT TGT SL S3 S2 S1 Pivot R1 (Futures) R R Exporters Strategy September Exports partially booked at & Spot September Imports hedged completely between Spot

3 EURINR Intraday Outlook EURO is quoting at , after testing in yesterday s session. The key reason for initial weakness in the euro was on back of Reuter s report which has showed that some elements of the ECB decision could be put off until December because ECB policymakers disagreed on whether to set a firm end date for their bond buying program in October. Later the markets shrugged off this report post the economical prints from EZ and German where both the EZ Current and account and Zew economic sentiment had beat the market estimates. Looking into the data break up s EZ ZEW Economic Sentiment was printed at 31.7 against 29.3 reported previously, whereas the German ZEW Current Conditions rose to 87.9 against an expectations of And the German ZEW Economic Sentiment was reported at 17.0 against an expectations of 12.5, and the same was reported at 10.0 in the previous month. Now looking forward the markets focus would be on today s FOMC meeting, if the FOMC statement proves to be dovish expect the euro surging above 1.20 mark. On the flip side if the FOMC gives guidance on further rates and trimming the balance sheet expect 1.20 to act as near term top. This is the daily chart of EURUSD pair, the pair traded in a range of on the higher side and on the lower side and traded side wise, the pair has been trading in range and yesterday touched the higher end if able to sustain and close above expects higher levels with 20DMA placed at strong support and flip side (fib 88.6% of near swing) for the day would be a strong resistance. Sideways-Bullish BUY EURUSD TGT SL BUY EURINR FUT TGT 77.50SL S3 S2 S1 Pivot R1 R2 R3 (Futures) Exporters Strategy September Exports partially booked at 76.50/60 Spot. Next tranche booked at September Imports to be booked close to 76 Spot

4 GBPINR Intraday Outlook Pound closed at INR in previous day s trading session, trading in the range of on the higher side and on the lower side domestically, while it closed at USD with day s trading range between on the higher side and on the lower side in international markets. Pound was seen trading volatile in yesterday s trading session after BoJ governor Mark Carney dialed back from his earlier hawkish tone with indicating that any upward revision in interest rates will be limited and gradual. The clear focus now is on the retail sales numbers due today showcasing the overall consumption direction of British economy on the back of rising inflation. British employers have a very pessimistic outlook on the economy which is hampering private investment, a survey by Recruitment &Employment Confederation showed on Wednesday. Market participants are eagerly awaiting U.S-FOMC meeting due today in which Fed Chair Janet Yellen could provide guidance regarding further monetary tightening and tapering of Fed s bond buying program and unwinding of its USD 4.5 trillion worth of treasury and mortgage backed assets on its balance sheet. Pound is expected to be range bound in today s trading session taking cues from the upcoming economic numbers. This is the daily chart of GBPUSD pair, during the day, the pair was trading in broader range of on the higher side and on the lower side, the pair had a narrow range day after extended run up following interest rate decision not the pair is respecting the levels of and on the flip side 1.36 has been a strong resistance with MACD remaining on the buy side utilize dips to buy. Sideways-Bullish BUY GBPUSD TGT SL BUY GBPINR FUT TGT SL S3 S2 S1 Pivot R1 R2 R3 (Futures) Exporters Strategy September Exports partially booked at Spot. Next tranche booked at Spot September Imports fully hedged at a stop of on Spot

5 JPYINR Intraday Outlook Japanese Yen closed at per 100 INR in previous day s trading session, trading in the range of the higher side and on lower side. Yen closed at against U.S Dollar in international markets in previous day s trading session, extending its decline marginally for the day while trading in the range of on the higher side and on the lower side. Japanese trade data for the month of August came out stronger than expected with trade balance coming at JPY billion easily out beating market expectations of JPY104.4 billion. Within that, exports surged by 18.1% on YoY basis ahead of median market forecast of 14.7%. Currency markets are awaiting U.S-FOMC statement due today in which Fed Chair Janet Yellen could provide guidance regarding further monetary tightening and tapering of Fed s bond buying program and unwinding of its USD 4.5 trillion worth of bonds on its balance sheet. This week the main factor driving yen is Prime Minister Shinzo Abe who is considering calling an election as early as next month. Markets doesn t seem to have any strong risk-off sentiment even after Trumps comments about totally destroying North Korea if it doesn t backs down from its nuclear challenge. Yen is expected to trade choppy with sideways movement in today s trading session. This is the dally chart of USDJPY pair, the pair was trading in a range of on the higher side and on the lower side and had a doji kind of pattern near 61.8Fibbonacci levels of near term swing signifying incision and finding resistance near upper Bollinger band, on the flip side the pair is having a strong support of to hold with prices trading in a broader range of expects prices to consolidate for the day. Sideways SELL USDJPY TGT SL BUY JPYINRFUT TGT SL S3 S2 S1 Pivot R1 R2 R3 (Futures) Exporters Strategy September Exports partially booked at Spot September Imports partially booked at Spot. Next tranche booked at Spot

6 Economic Data for the Day Time Currency Data Forecast Previous 2:00pm GBP Retail Sales m/m.2% 0.30% 7:30pm USD Existing Home Sales 5.46M 5.44M 8:00pm USD Crude Oil Inventories 2.8M 5.9M 11:30pm USD FOMC Economic Projections - - USD FOMC Statement - - USD Federal Funds Rate 1.25% 1.25% Report prepared by: Siddhesh Ghare siddhesh.ghare@karvy.com Deepak Agarwal deepak.agarwal@karvy.com Shashank Damaraju shashank.damaraju@karvy.com Head Office Karvy Millennium,Plot No 31, Financial District, Gachibowli, Hyderabad T: / 6635 Corporate Office 131, Andheri Industrial Estate, Off Veera Desai Road, Andheri (W), Mumbai T: , Mob No Disclaimer: The information and analysis contained in this document come from sources believed to be reliable and our own internal research; however, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of this information. Nothing contained in this publication shall constitute an offer to sell/purchase or an invitation/ solicitation to do so for any currency, security, commodity or equity. Karvy Forex & Currencies Pvt. Ltd. accepts no liability whatsoever for any loss, howsoever arising, from any use of this document, its contents or otherwise arising in connection therewith.no part of this document can be circulated or reproduced in any form without prior approval of Karvy Forex & Currencies Pvt. Ltd.