Currencies Daily Report www.karvycurrency.com Monday 10 April 2017 Market Overview Asian equities trade mixed today with Nikkei posting gains despite regional tensions heightened as the U.S military sent an aircraft carrier group near the Korean Peninsula in response to recent provocations by North Korea. European equities closed positive while U.S. equities closed almost flat last week. The Dollar Index rose after a drop in the U.S. unemployment rate for March and as markets digested a much lower-than-expected number of jobs created in the month keeping the outlook for interest rates intact this year. The dollar started this week at three-week highs against a currency basket on Monday, after a key U.S. Federal Reserve official reinforced the central bank's commitment to interest rate hikes. The Rupee against the Dollar is expected to open at 64.38 following in the footsteps of DXY but the upside in USDINR still remains restricted eyeing dollar inflows from FPIs. Financial markets were also watching out for developments in the Syrian civil war following last week's U.S. missile strikes on an air base in Syria, which had given the perceived safe-haven Japanese currency a boost. Geopolitical tensions in Asia were also in focus, after the U.S. decision to move a Navy strike group toward the Korean peninsula following provocative behavior from North Korea. White House national security adviser H.R. McMaster said on Sunday that the move was a "prudent" step. Geopolitical risks will add to edgy market tone. Markets were fairly resilient to news of the U.S. missile strike on a Syrian airbase, on top of a soft March jobs report. But after knee-jerk risk-aversion trades, focus shifted back to bearish implications of FOMC minutes where the discussion of balance sheet normalization suggested a more hawkish Fed stance versus the view of a "dovish tightening" on March 15th. Traders will look to gauge the global reaction and fallout from Syria, while inflation and production data highlight the economic calendar. Indices Last Close Previous Close % CHANGE NASDAQ 5418.37 5420.88-0.05 DOW JONES 20656.10 20662.95-0.03 NIKKEI 18785.50 18664.63 0.65 HANGSENG 24286.50 24263.00 0.10 Currencies Today Morning Yesterday at 05:00 PM % CHANGE DXY 101.30 101.13 0.17 EURUSD 1.0579 1.0633-0.51 GBPUSD 1.2379 1.2430-0.41 USDJPY 111.43 Today Morning 110.67 Yesterday at 05:00 PM 0.69 % CHANGE USDINR Spot 64.38 64.30 0.12 IRF 103.16 103.28-0.12
USDINR Intraday Outlook The Dollar against all majors rallied shrugging off disappointing U.S. employment data as investors remained focused on the Federal Reserve s plans to tighten monetary policy. The dollar initially sold off following the release of the weaker-than-anticipated employment data before regaining ground as New York Fed President William Dudley said on Friday that plans to trim the Fed s balance sheet later this year would prompt only a "little pause" in its rate hike plans. The Dollar against Rupee is expected to start the week with little gains where USDINR might test 64.50 levels on spot during the day which would be a barrier for the pair to surpass taking into consideration the continuous Dollar inflows from FPIs and Foreign banks being heard selling dollars for them. Rupee strength against other currencies would also add on to the pressure on USDINR. This is the daily chart of USDINR pair, the pair after opening yesterday at 64.81 and made a high of 64.85 and was trading with negative bias during the day, and day before after the RBI monetary policy the pair violated the supports of 65.00 levels and trended on the down side, on spot after violating 64.80 had a strong momentum, with Trend following indictor MACD/Moving average on the sell side the pair likely to drift lower having said that RSI remains oversold can the pair is due to bounce so utilize sell on rise. Bearish Sell USDINR FUT 64.63-64.68 TGT 64.38-64.20 SL 64.83 64.20-64.55 S3 S2 S1 Pivot R1 (Futures) 63.77 64.00 64.14 64.50 64.69 R2 64.83 R3 65.06 Exporters Strategy Importers Strategy All pending exports hedged(stopped out) at 64.70 Suggest pending receivables to be held with a stop above 65.05
EURINR Intraday Outlook EURO is trading at 1.0577, reversing from the highs of 1.0668 in Friday s session following to its lowest level against US dollar in 3weeks. Key reasons for this move was ongoing terror attacks in Europe which is making investors nervous about Le Penn s increased chances of winning in French Presidential race versus Emmanuel Macron in first round of voting on 23rd of April and go through to a May 7 runoff. Le Penn is running on a campaign of anti-immigration and antiterrorism and latest polls have shown that the race is tightening. Adding to this, ECB President Draghi in the previous week said that ECB is still worried about the inflation and also said that ECB need some more inflation confidence to change its stance. ECB member Constancio agrees to Draghi s comments where he stated it is too soon to declare success on inflation and Praet believes rates should stay at current or lower levels well past QE. German Industrial Production and Trade Balance number were reported better than expectations but had no impact on shared currency. Looking ahead, economic calendar remains light for the day. Expect EUR/USD pair to trade sideways ahead of upcoming French elections and investors concerns about terror attacks surrounding euro zone. This is the daily chart of EURUSD, the pair after opening at 1.0641 and made a high of 1.0666 and was trading with a negative bias during the day after the Nonfarm the pair violated decisively 1.0630 and traded lower after trading in a narrow range of 1.0645-1.0690 for past couple of day s and today likely to continue on the downside so utilize rise to sell the pair on the intraday bases with now supports comes at 1.0520 levels. Bearish SELL EURUSD 1.0600-1.0620 TGT 1.0550 SL 1.0635 SELL EURINR FUT 68.45-68.50 TGT 68.22 SL 68.61 68.00-68.40 S3 S2 S1 Pivot R1 R2 R3 (Futures) 67.84 68.10 68.26 68.70 68.84 69.00 69.25 Exporters Strategy April exposures completely hedged as per suggestions Importers Strategy Pending April payables to be held with a stop above 68.90
GBPINR Intraday Outlook British Pound is trading at 1.2378, reversing from the higher levels of 1.2478 in Friday s session after reported economic data was softer. Sterling made a 3 week s low of 1.2361 in Friday s session. Key reason for this move was UK s production and trade which was lower than expectations disappointed investors. Industrial production for February unexpectedly declined to 0.7%. The total trade deficit in February blew out to GBP 3.8 bln from GBP 3.0 bln. Sterling lost ground against the dollar, euro and other currencies following the underwhelming data set. More over PMI survey data for February portended more weakness to come in the manufacturing sector, and while the service sector strength has offset there is a performance gap emerging between composite UK and Euro zone data. Looking ahead, economic calendar remains light for the day. Expect GBP/USD pair to remain under pressure and trade in the range of 1.2350-1.2410. This is the daily chart of GBPUSD, the pair after opening at 1.2471 the pair made a high of 1.2477 and was trading with a negative bias after trading in a narrow range for past few day s in 1.2420 on the down side and 1.2505 on Friday the pair violated the lower range of 1.24 with a bearish candle if sustain can drift lower with trading below 50DMA at 1.2418 that was acting as a support now becomes resistance so utilize sell on rise strategy for the day. Bearish SELL GBPUSD 1.2400-1.2420 TGT 1.2340 SL 1.2435 SELL GBPINR 80.10-80.20 TGT 79.60 SL 80.32 79.40-80.00 S3 S2 S1 Pivot R1 R2 R3 (Futures) 79.08 79.47 79.70 80.30 80.48 80.71 81.10 Exporters Strategy All pending exposures stopped ot at 81.00 Importers Strategy Maintain a stop at 81.10 for the pending April payables
JPYINR Intraday Outlook Japanese Yen is trading at 111.44. USD/JPY pair has fallen from 110.73 to the lows of 110.16 in Friday s session following the soft U.S. jobs report, though subsequently rallied back to 110.97 highs. US dollar index has recovered from the lows of 100.40 and rallied to 101.22 despite the U.S. missile attack in Syria, and uncertainty over the outcome of the U.S./China summit. Japanese Adjusted Current Account numbers were reported way better than expected this morning. Bank of Japan s Governor Haruhiko Kuroda said that the economy to continue on a moderate recovery trend. We prefer buying USD/JPY pair on dips with targeting 111.70. This daily chart of USDJPY, the pair after opening at 110.85 made a low of 110.09 and bounced from the lower end of the support of previous low and downward sloping trend line supports near 110 levels and recovered now trading near to 111.50 levels on 30mins charts 111.70 is a strong resistance if able to surpass the resistance can head much higher with 50DMA at 112.70 levels so intraday traders utilize dips to buy the pair. Bearish BUY USDJPY 111.10-110.90 SL 110.70 TGT111.70 SELL JPYINR 58.05-58.15 TGT 57.78 SL 58.26 58.60-59.00 S3 S2 S1 Pivot R1 R2 R3 (Futures) 57.68 57.88 58.01 58.40 58.49 58.62 58.82 Exporters Strategy Importers Strategy April exposures hedged completely April pending imports stopped at 58.60 levels
Economic Data for the Day Time Currency Data Forecast Previous 01:40 AM USD Fed Chair Yellen Speaks Report prepared by: Siddhesh Ghare siddhesh.ghare@karvy.com Deepak Agarwal deepak.agarwal@karvy.com 040-33216636 Shashank Damaraju shashank.damaraju@karvy.com 040-33216635 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.