6-JUNE-2017 FROM CEO'S DESK The US dollar fell to seven-week low and US 10 year yield hovers around 7-month low after weaker services PMI and ISM-manufacturing PMI. Yesterday, Indian equities had extended its gains and rupee remained stronger on inflows and positive monsoon sentiment. However, rupee is likely to remain flat ahead of RBI monetary policy decision which is due on Wednesday. RBI unlikely to move their policy rates this time as lower inflation and excess liquidity in banking system is already doing good job. The intraday range for rupee would be 64.17-64.47. RBA kept their cash rate steady at 1.5% for a ninth straight month amid renewed fears over a growing consumer spending strike. However, the market-implied chance of another interest rate cut by year end rose to about 17 per cent after disappointing economic data in the past month. Euro took resistance near 1.1285 as traders doubted that any ECB shift in policy stance could strengthen the euro further. But Sterling rose to its highest in ten days, with investors taking comfort from an opinion poll that gave Britain's ruling Conservative Party a comfortable lead ahead of election. The risk off sentiment led to demand for safe haven like yen as caution mounted ahead of Britain's election, ECB meeting, and former FBI Director James Comey's testimony. CURRENCY USDINR EURUSD GBPUSD USDJPY COMMENTS The Indian rupee was little changed against the dollar, as investors await outcome of the monetary policy decision, due tomorrow.it is expected to maintain status quo on rates. Euro fell as U.S. dollar rebounded from a near seven-month low as traders doubted that any ECB shift in policy stance could strengthen the euro further Sterling rose to its highest in ten days, with investors taking comfort from an opinion poll that gave Britain's ruling Conservative Party a comfortable lead ahead of election The dollar hit a six-week low against the safe-haven yen as caution mounted ahead of Britain's election, a ECB meeting, and former FBI Director James Comey's testimony INTRADAY OUTLOOK BEARISH 64.17-64.47 BULLISH 1.1230-1.1350 BULLISH 1.2845-1.2990 BEARISH 108.80-110.50 COMMODITIES/DI GOLD SILVER WTI CRUDE DOLLAR INDEX INFLOWS (5-06-2017) FII DII * Figures are in Rs. Crores LAST CHANGE % CHANGE REGION GLOBAL INDICES LAST CHANGE % CHANGE $1,283 4.49 0.02% HANG SENG 25949 86 0.33% $ 17.59 0.08 0.23% ASIA KOSPI 2368-3 -0.13% $47.14-0.26 0.57% NIKKEI 20035-133 -0.66% 96.63-0.16 0.07% SENSEX 31256-53 -0.17% INDIA NIFTY 9658-17 -0.18% BUY SELL NET CAC 5307-35.5-0.67% 4219.86 3743.22 476.64 EUROPEAN DAX 12822 158 1.23% 1794.45 1780.83 13.62 FTSE 7525-21 -0.28% US DOW 21184-22 -0.10% NASDAQ 5878-3 -0.05%
COUNTRY TIME MAJOR GLOBAL EVENT ACTUAL FORECAST PREVIOUS IMPACT ON FX 5/6/2017 GBP 2:00 PM SERVICES PMI 53.8 55.1 55.8 BEARISH USD 7:30 PM ISM NON MANUFACTURING PMI 56.9 57.1 54.0 BEARISH AUD 10:00 AM RBA RATE STATEMENT 1.5% 1.5% CENTRAL BANKS INTEREST RATES LIBOR RATES ON 1M 3M 6M 1Y CENTRAL BANK RATES NEXT MEETING USD 0.93 1.08 1.22 1.42 1.73 RBI 6.25% June 6, 2017 EUR -0.43-0.40-0.37-0.29-0.17 FED 1.00% June 14, 2017 GBP 0.22 0.25 0.29 0.42 0.62 ECB 0.00% June 8, 2017 JPY 0.04-0.02-0.01 0.02 0.13 BOE BOJ RBA 0.25% -0.10% 1.50% June 15, 2017 June 16, 2017 June 6, 2017 INDIA'S KEY RATES 10 YEAR CARRY LAST CHANGE AGAINST USD REPO RATE 6.25% REVERSE REPO 6.00% BOND YIELD TRADE INFLATION 2.99% CRR 4.00% INDIA 6.64% 0.02 INR 5.00% GDP (Q/Q) 6.10% SLR 20.50% US 2.16% 0.00 EUR 1.00% GBP 0.75% JPY -1.10% MONTH END FORWARD PREMIUM- IN RUPEES (BID RATE) MONTH 1M 2M 3M 6M 1Y 2Y 3Y 4Y 5Y 10Y USDINR 0.17 0.43 0.69 1.44 3.16 6.05 8.92 12.00 14.61 28.85 EURINR 0.27 0.69 1.10 2.31 5.19 10.29 15.54 21.33 26.38 56.05 GBPINR 0.21 0.55 0.84 1.95 4.60 9.18 14.18 19.38 23.99 51.91 JPYINR 0.16 0.43 0.69 1.54 3.69 7.57 11.70 16.63 20.53 46.95
OTHER MAJOR GLOBAL NEWS * RBA held rates at 1.5% & statement has no significant changes * Dollar fell to 7-month low after weaker-than-expected services PMI and ISM non-manufacturing PMI * Arab nations cut ties with Qatar in new Mideast crisis CHART OF THE DAY - USDJPY SPOT RATE- 109.85 TECHNICAL OBSERVATION The USDJPY pair has breached its previous low of 110.30 levels and now making new lower low. The downtrend channel and Bollinger band suggests bearish trend. It is expected to fall further till 109.20-108.80 levels. INTRADAY RANGE 108.80-110.50 [NEGATIVE BIAS] CURRENCY 3 MONTHS OUTLOOK 6 MONTHS OUTLOOK RANGE OUTLOOK RANGE OUTLOOK $ INDEX 96.50-101.30 BULLISH 94.00-103.60 BULLISH EURUSD 1.0750-1.1350 BEARISH 1.0340-1.1620 BEARISH GBPUSD 1.2350-1.3150 BEARISH 1.2050-1.3460 BEARISH JPYUSD 107-115.50 BULLISH 105-121 BULLISH AUDUSD 0.7150-0.7620 BEARISH 0.7150-0.7950 BEARISH USDCAD 1.3200-1.3800 BULLISH 1.3000-1.4200 BULLISH
CURRENCY DAILY TECHNICAL CHART
INTEREST RATE DIFFERENTIAL CHARTS (VS US DOLLAR)
CURRENCY OPTION STRATEGY RECOMMENDED ON:- 26/05/2017 FORWARD RATE:- 64.92 (WHEN RECOMMENDED) STRATEGY FOR: IMPORTER SPOT RATE: 64.52 (WHEN RECOMMENDED) STRATEGY We suggest a seagull strategy for June expiry. We recommend buying one call option of 65.00 strike, selling one call option of 65.50 strike along with selling put option of 64.00 strike with a net outflow of 5 paise. This strategy is suitable for those impoters who want to hedge on the upper side (Better than forward rate) while simultaneously participating on the downside. 67 66 65 64 63 62 JUN '16 EXPIRY PREMIUM PAYOFF TABLE BUY CALL @ 65.00-0.30 PAID BUY NET RATE SELL CALL @65.50 0.15 RECEIVED IF RATE ON CALL @ SELL CALL SELL PUT FOR SELL PUT @64.00 0.10 RECEIVED EXPIRY IS 65.00 @65.50 @64.00 NET PAYOFF IMPORTER NET PREMIUM -0.05 PAID 63-0.3 0.15-0.9-1.05 64.05 63.5-0.3 0.15-0.4-0.55 64.05 PAYOFF CHART 64-0.3 0.15 0.1-0.05 64.05 64.5-0.3 0.15 0.1-0.05 64.55 64.75-0.3 0.15 0.1-0.05 64.8 65-0.3 0.15 0.1-0.05 65.05 65.25-0.05 0.15 0.1 0.2 65.05 Market Price 65.5 0.2 0.15 0.1 0.45 65.05 66 0.7-0.35 0.1 0.45 65.55 Net rate for importer 61
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