Currencies Daily Report Powered by Karvy Forex & Currencies Pvt. Ltd. www.karvyforex.com Thursday 03 Aug 2017 Market Overview A steady growth in earnings. Dow hits 22000 for the first time, another milestone; a 1000 points rally in just 107 sessions, while other U.S. indices closed almost flat yesterday. Meanwhile, Asian equities took a dip early today on investors booking profits. With the new private sector jobs number for July missing the forecasts, lowering expectations for NFP due this week, the Dollar took a hit where the index dropped close to 92.50 levels, the lowest this year so far. The weaker-than-expected private payrolls report comes two days ahead of nonfarm payrolls data due Friday, pointing to a possible slowdown in the U.S. labor market, adding to expectations the Federal Reserve may abandon its plan to hike rates at least once more this year. The rupee is expected to open slightly higher against the US dollar around 63.67 and move in the range of 63.50-63.85. With the RBI having a rate cut of 25bps the rupee has appreciated where crucial levels on USDINR have been broken and more of selling pressure is expected on the pair. Foreign banks are heard of being selling dollars heavily probably on behalf of overseas investors, who mightas well opt for the Cochin Shipyard IPO that closes today. "All the factors are in favour of rupee," fx dealers said. "Crucial levels have been broken, exporters' selling may continue. Also, corporate positioning may boost. So, supply (of dollars) is dominating right now." Exporters are likely to sell the greenback after noting the sharp rise in the Indian currency, dealers said. The Indian currency breached the crucial psychological resistance level of 64.00 a dollar on Wednesday due to persistent dollar sales by foreign banks, which may shift the band for the rupee between 63.50 and 64.00 a dollar. Importers of oil and other commodities may purchase dollars, albeit in low volumes, which may weigh on the rupee. Major state-owned banks are likely to purchase the greenback on behalf of the Reserve Bank of India to curb sharp volatility in the domestic currency, Fx dealers said. Weakness in the dollar index is also likely to boost the rupee, dealers said. On an annualized basis, premium on the one-year exact-period contract was at 4.52% on Wednesday, compared with 4.61% at the previous close. Premium on the one-year month-end contract was at 285.00 paise as against 293.00 paise on Tuesday. Indices Last Close Previous Close % CHANGE NASDAQ 6362.65 6362.94 0.00 DOW JONES 22016.24 21963.92 0.24 NIKKEI 20080.04 19985.79 0.47 HANGSENG 27550.00 27515.00 0.13 Currencies Today Morning Yesterday at 05:00 PM % CHANGE DXY 92.96 93.02-0.06 EURUSD 1.1843 1.1827 0.14 GBPUSD 1.3216 1.3221-0.04 USDJPY 110.71 Today Morning 110.74 Yesterday at 05:00 PM -0.03 % CHANGE USDINR Spot 63.6400 63.7000-0.09 IRF 102.06 101.81 0.25
USDINR Intraday Outlook US dollar index is trading at 92.97 after making a 2 years low of 92.56 against a basket of currencies. The weakness in US dollar came in post the ADP Nonfarm employment report has missed out the expectations, by 8k, in complete figures report was printed at 178K against an expectations of 185k, the same was reported at 191k previously. Most of the data from US has been on softer mode which raised doubts in the investor s community about further rate hikes. Before the ADP Nonfarm employment changes were reported, most of the market participant expected that Friday s Nonfarm payroll will be watched by the fed and if the data would beat the estimate there are little chance for the investors to expect a rate hike. As ADP Nonfarm employment would always be helpful to shape the expectations for Nonfarm Payroll, the disappointment in ADP s report now Friday s nonfarm is also expected to be reported lower and this has added to uncertainty about the pace of future Federal Reserve policy tightening.further the sell-off came in DXY following the comments from Fed officials who said soft data will keep the fed to think about further tightening, these comments added some weight to the weakness in USD. Coming USD-INR, Rupee has appreciated against US dollar post RBI came out with cutting the interest rate by 25bps, where the central has also change the reverse repo, MSF as well as Bank rate by 0.25%. It has kept the GVA projections unchanged at 7.3%. Now looking forward some buying in USD-INR can be expected near 63.30 64.40 levels. This is the daily chart of USDINR, the pair has traded in the range of 63.59 on the downside and 64.13on the higher side, the pair hasbeen trading sidewise for many days and yesterday after the RBI policy the pair violated the supports of 64.00 and trended on the downside, the pair is expected to open near 64.65 and with yesterdays the bearish candle the pair is expected to follow the ongoing trend with minor supports at 63.50 Bearish SELL USDINR FUT 63.92-64.00 TGT 63.68 SL 64.10 63.40-63.80 S3 S2 S1 Pivot R1 (Futures) 62.93 63.46 63.66 63.99 64.19 R2 64.52 R3 65.05 Importers Strategy August Exports to be partially booked targetting 64.35/40 Spot August Imports partially booked at 64.10/15 & 63.83/84 Spot
EURINR Intraday Outlook EURO is trading at 1.1847 after being topped at 1.1909 which was highest levels in past 15-months. There were no major economic report which were released in yesterday s session but the only report released was PPI which was also weaker than expected. But the demand for EURO against US dollar came in because of the weakness in US dollar following softer than expected US data, as well as less than hawkish comments from FOMC member who spoke in the later part of the day added some weight to the weakness. Yesterday, ADP sreport suggested that US labor markets are weakenening. As ADP Nonfarm employment would always be helpful to shape the expectations for Nonfarm Payroll, the disappointment in ADP s report now Friday s nonfarm is also expected to be reported lower and this has added to uncertainty about the pace of future Federal Reserve policy tightening. Coming to EZ we have ECB s Economic Bulletin later this afternoon this if the ECB continues its hawkishness we can expect the EUR-USD pair heading towards 1.20 mark. This is the daily chart of EURUSD the pair trade in a broader range 1.1794 on the lower side and on the higher side 1.1904and traded with a positive bias, the pair has been making higher top and higher bottom and yesterday went above the 1.19 mark and corrected, on a smaller time frame the is having a divergence (price and indicator) suggesting bulls are losing momentum and prices can cool off, with trend remaining on the buy side lower levels canbe utilize to go long. Sideways BUY EURUSD 1.1820-1.1800 TGT 1.1880 SL 1.1790 BUY EURINR FUT 75.52-75.45 TGT 75.85 SL 75.36 75.10-75.80 S3 S2 S1 Pivot R1 R2 R3 (Futures) 74.70 75.24 75.44 75.78 75.98 76.32 76.86 August Exports partially booked at 75.40 Spot Importers Strategy August imports to be partially booked targetting 74.85/90
GBPINR Intraday Outlook GBP-USD is trading at 1.3219, after making more than 2-years high against US dollar at 1.3250 in yesterday s session. Weakness in US dollar following weaker data from US economy along with optimism about today s BoE s monetary policy helped the GBP to appreciation against USD about more than 2years high. In June s policy meeting the Bank of England has shocked the markets by voting a 5-3 to keep rates unchanged. Where the3 policymakers felt that an immediate rate hike was necessary asper level of inflation and the economy s Brexit resilience. Initially Mark Carney did dint vote for a rate hike but later he said they would debate a rate rise in the coming months, sparking the current rally in GBP. Post that Adam Haldane who also did not vote for a hike last month said on numerous occasions since then that they seriously need to look at a rate hike. Now GBP would surge to highest levels if at least the BoE s would continue its hawkishness. This is the daily chart of GBPUSD pair the pair traded in the broader range of 1.3250on the higher side and 1.3192 on the lowerside, the pair traded side wise and was finding resistance near 1.3250 levels and with today BOE having policy meet the pair is expected to trade volatile having strong resistance at 13250 with supports at 1.3150, so intraday likely to be volatile. Bullish Buy GBPUSD 1.3170-1.3150 TGT 1.3240 SL 1.3140 Buy GBPINR FUT 84.28-84.20TGT 84.58 SL 84.10 83.90-84.50 S3 S2 S1 Pivot R1 R2 R3 (Futures) 84.04 84.22 84.32 84.70 84.88 84.98 85.16 Importers Strategy August Exports partially booked targetting 84.40/50 Spot August imports to be partially booked targetting 84 Spot
JPYINR Intraday Outlook USD-JPY is trading at 110.73after hitting 110.28 in yesterday s. Yen appreciated due to the weakness in US dollar which came in post the ADP Nonfarm employment report has missed out the expectations, by 8k, in complete figures report was printed at 178K against an expectations of 185k, the same was reported at 191k previously. Most of the data from US has been on softer mode which raised doubts in the investor s community about further rate hikes. Before the ADP Nonfarm employment changes were reported, most of the market participant expected that Friday s Nonfarm payroll will be watched by the fed and if the data would beat the estimate there are little chance for the investors to expect a rate hike. As ADP Nonfarm employment would always be helpful to shape the expectations for Nonfarm Payroll, the disappointment in ADP s report now Friday s nonfarm is also expected to be reported lower and this has added to uncertainty about the pace of future Federal Reserve policy tightening. Further the sell-off came in DXY following the comments from Fed officials who said soft data will keep the fed to think about further tightening, these comments added some weight to the weakness in USD. This is the daily chart of USDJPY pair, the pair traded in a broader range of 110.28 on the downside and 110.98 on the higher side, the pair hasbeen trading in a smaller range and yesterday after the doji pattern near the support of upward sloping trend line the pair had a small bullish candle and expects 110.likley to act as a support for the day. Bearish BUY110.30-110.10 TGT 111.10 SL 110.00 SELL JPYINR FUT 57.82-57.90 TGT 57.55 SL 58.01 57.40-58.00 S3 S2 S1 Pivot R1 R2 R3 (Futures) 57.16 57.38 57.51 57.90 58.01 58.14 58.36 August Exports to be held open for now Importers Strategy August imports to be partially booked targetting 57.50
Time Currency Data Forecast Previous 1:30 PM EUR 55.4 55.4 2:00 PM GBP 53.6 53.4 4:30 PM GBP GBP 2-0-6 3-0-5 GBP 5:00 PM GBP Economic Data for the Day Final Services PMI Services PMI BOE Inflation Report MPC Official Bank Rate Votes Monetary Policy Summary Official Bank Rate Asset Purchase Facility MPC Asset Purchase Facility Votes BOE Gov Carney Speaks Unemployment Claims ISM Non-Manufacturing PMI Factory Orders m/m GBP 0.25% 0.25% GBP 435B 435B GBP 0-0-8 0-0-8 6:00 PM USD 242K 244K 7:30 PM USD 56.9 57.4 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 2.9% -0.8% Head Office Karvy Millennium,Plot No 31, Financial District, Gachibowli, Hyderabad - 500 031. T: +91-40-33216636 / 6635 Corporate Office 131, Andheri Industrial Estate, Off Veera Desai Road, Andheri (W), Mumbai-400053. T: +91-22-26399040, Mob No. 9987466794 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.