Currencies Daily Report

Transcription

1 Currencies Daily Report Tuesday 02 May 2017 Market Overview Wall Street climbed on Monday, boosted by gains in Apple and other big tech stocks that more than offset weak economic data and pushed the Nasdaq Composite to another record high. Asian shares advanced on Tuesday, helped by rising optimism on the technology industry and easing concerns over North Korea, while the dollar edged up to onemonth high versus the yen & traded higher against majors yesterday, despite the release of downbeat economic data while bullish comments from U.S. Treasury Secretary Steven Mnuchin had little impact on the greenback. The Rupee against the Dollar is expected to open around levels. After India CEA Subramanian's concerns on rupee becoming too strong last week, the rupee had eased a bit. Week Ahead: A Collision Course A convergence of politics, as well as monetary and fiscal policy, will collide this week after President Trump finished commemorating his first 100-days in office over the weekend. Despite lobbying Congress hard for a second vote on the ACA repeal and a Continuing Resolution (CR) on government funding, those cans were kicked down the round with a delayed vote on the former and successful one-week funding bill on the latter that will buy a little more time on both fronts. Passed by the House, the CR will keep the government running this week allowing lawmakers more time to debate on a long term bill to take operations through the rest of the fiscal year. The leadership of both houses indicated they are close to a broad spending plan. Markets will weigh these developments closely ahead of the FOMC meeting and April payroll data. Labor Day holidays on Monday in much of Europe and Asia will make for a slow start, however. Asia cools off this week at least in terms of data, though perhaps not geopolitics, after N. Korea fired another failed test missile. Japan manufacturing PMI and China manufacturing and services PMIs are on tap, along with trade and price figures for the bulk of the smaller regional economies and Korea holds it presidential election next week on May 9. In Europe, in wake of the mixed messages from the ECB last week, the focus will return to Eurozone politics with the second round of presidential elections in France on Sunday. Front-runner and market favorite Macron will have to slip badly to hand off the election to nationalist Le Pen, though Frexit and a breakup with the Eurozone seem remote for now according to the polls. To the contrary, Brexit remains on track with UK PM May and her Conservative Party galvanizing a substantive majority heading toward June 8 elections. Indices Last Close Previous Close % CHANGE NASDAQ DOW JONES NIKKEI HANGSENG Currencies Today Morning Yesterday at 05:00 PM % CHANGE DXY EURUSD GBPUSD USDJPY Today Morning Yesterday at 05:00 PM 0.13 % CHANGE USDINR Spot IRF

2 USDINR Intraday Outlook US dollar index is trading at 98.89, remained subdued trough most of the session yesterday as markets across the globe were closed for May Day. Personal spending data along with ISM Manufacturing PMI and employment was reported yesterday which was lower than expected and this has resulted in weighing on US dollar against basket of currencies. Trading range for the day was Looking ahead, we have Fed interest rate decision due on 2nd and 3rd where no changes are expected from FOMC. Policymakers will leave the door open for another tightening next month, but won't pre-suppose the outcome. On the economic outlook, officials are likely to reiterate a moderate pace of expansion and will play down the weakness in Q1 as temporary. The Fed will also repeat that inflation is still moving toward the 2% target, even as today's March PCE price figures showed some slowing in the annual pace to 1.8% y/y from 2.1% y/y for the headline, and to 1.6% y/y from 1.8% y/y for the core. Remember there's no press conference or release of updated economic and dot plot forecasts this time around. Expect US dollar to trade sideways ahead of FOMC decision. This is the daily chart of USDINR pair, during the last trading day the pair opened and saw the pair trading with positive bias as indicator RSI and price action signifies divergence, and low for the day was 64.33, the pair has been trading in a narrow range in the range of and few days back and broke on the downside but could not sustain the lower levels and bounce strong resistance will come near spot and likely to find strong resistance there. Sideways SELL USDINR FUT TGT SL S3 S2 S1 Pivot R1 (Futures) R R Exporters Strategy Importers Strategy May Exports hedged at (Stop Levels) May imports partially hedged at 64.85/90 and 64.20/25

3 EURINR Intraday Outlook EURO is trading at , remaining resilient against US dollar trough most of the session yesterday as markets across the globe were closed for May Day. Trading range for the day was The EU s inflation figures were out last, there is a prospect for ECB to shift towards neutral bias. Today we have German Manufacturing PMI along with Eurozone s Manufacturing PMI to be reported this afternoon along with unemployment rate. Looking forward, now the markets would focus on final round of French election this weekend rather than any economic data and the markets expect its friendly candidate Macron to take the Presidential office. With optimism over French elections along with positive economic data will keep downside to be limited in EURO. This is the daily chart of EURUSD, the pair opened at and madea high of and reversed from the higher levels in the us session, the pair was trading with some positive bias in European session after gapped up few days ago and made a swing high of , the pair has been trading in a broader range of and on the up side and likely to test the lower range for the day with cross over in MACD still secondary trend remains on the upside and likely to trade with some positive bias with strong support at levels. Bullish BUY EURUSD TGT SL BUY EURINR FUT TGT SL S3 S2 S1 Pivot R1 R2 R3 (Futures) Exporters Strategy May exports to be held open with a stop below Importers Strategy May imports partially booked at levels. Remaining to be held with a stop above 70.50

4 GBPINR Intraday Outlook Pound is trading at , remaining lower in yesterday s session, ahead of PMI reports today. UK s was closed for May Day along with other markets across the globe. Trading range for the day was Friday UK s Q1 GDP numbers were reported along with Nationwide HPI and BBA Mortgage Approvals and all the data sets were reported lower than expectation. Despite lower than expected economic data, we have witnessed Pound stabilizing at 1.29 levels. The optimism over the snap elections on 8th of June has kept boosting the shared currency. Today, we have UK s manufacturing PMI to be reported and it is expected to be lower compared to last one. For today, expect GBP to remain lower ahead of the PMI reports this afternoon. This is the daily chart of GBPUSD, during the last trading day the pair after opening at made a low of and was trading with a positive bias, the pair made a high of and on Monday saw the pair some profit booking after making breakout of the small pennant pattern above levels with MACD remaining on the positive side and charts suggest classic pennant pattern and still the pair remains on the buy side irrespective of RSI remaining overbought levels on the daily chart, intraday traders can utilize dips to buy the pair. Bullish BUY SL TGT BUY GBPINR FUT TGT SL S3 S2 S1 Pivot R1 R2 R3 (Futures) Exporters Strategy Importers Strategy May exports partially booked at levels. Stop for the remaining to be maintained at levels. May imports partially hedged at levels

5 JPYINR Intraday Outlook Japanese Yen is , depreciating against US dollar. Yesterday s trading range was Most markets in Asia were closed yesterday along with markets in Europe and made thin trading conditions. Option and Japan exporter standing offers are reportedly in place from , which may have prompted some position squaring. In addition, the pairing has not been able to close over the 50-day moving average, currently at , for the past four sessions. Today, we have Bank of Japan Monetary Policy Meeting Minutes to be reported. Looking ahead, we have Fed interest rate decision due on 2nd and 3rd where no changes are expected from FOMC. Policymakers will leave the door open for another tightening next month, but won't pre-suppose the outcome. And expect USD/JPY pair to trade sideways ahead of FOMC. The USDJPY Daily chart,the pair was trading range bound after opening at made a high of , the pair having support at on the downside and on the on the upside, a day before the pair the made a shooting star marked by the arrow near the resistance levels of 112. But trading above that signifies continuation of the trend if the pair able to sustain and close above 112. Can expect higher levels in coming session, with downward sloping trend line likely to meet near 113. Where the pair likely to find some reversal. Sideways BUY USDJPY TGT SL SELL JPYINR FUT TGT SL S3 S2 S1 Pivot R1 R2 R3 (Futures) Exporters Strategy May exports partially booked at and Importers Strategy May imports partially booked at and 57.90

6 Economic Data for the Day Time Currency Data Forecast Previous 12:45 PM EUR Spanish Manufacturing PMI :00 PM GBP Manufacturing PMI Report prepared by: Siddhesh Ghare Deepak Agarwal Shashank Damaraju Disclaimer: The information and views presented in this report are prepared by Karvy Stock Broking Limited. The information contained herein is based on our analysis and up on sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor any person connected with any associated companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above-mentioned companies from time to time. Every employee of Karvy and its associated companies are required to disclose their individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Stock Broking Ltd.