Monday, January 27, 2014
RBI Reference Rate
Pair
Last Closing
MTD (%)
YTD (%)
$/
62.177
-5.59%
13.40%
€/
85.0894
-2.26%
17.40%
£/
103.3817
0.84%
15.87%
¥/
60.1400
-10.02%
-4.86%
Major global currencies witnessed appreciation
against the US dollar last week backed by strong set
of economic data points, while emerging market
currencies tumble before the end of the week to
trade at monthly lows. The week started with
strong GDP numbers for China, followed by better
than expected unemployment rate from UK, along
with service and Manufacturing PMI form Germany
and Euro zone, beating street expectations. On the
other hand, the selling in dollar increased, after the
data from US disappointed as Jobless Claims, PMI
and Exiting home sales all came below expectation,
creating uncertainties of the Fed bond purchases
program.
The INR depreciated against the dollar during the
week. The dollar demand from a large state-run
bank to meet the government's defence purchase
needs, kept them under pressure. Ease in inflation
data last week have build up the expectations that
the RBI will hold its interest rates and prefer to wait
for further data. FII’s were active buyers in the
domestic equity markets ending the week with a
buying of ~1150 crore. India’s Forex Reserves
continue to be flat at $292.08billion.
This week is data heavy week, starting with RBI
declaring its monetary policy, followed by Fed
giving furthers direction over its bond purchases
program. The US and UK will release its GDP date,
Euro zone and Germany will release CPI and
unemployment rate.
On Shore
Pair
Contract
Open
Close
1 Week Chg
%change
OI
OI change
Pivot
Resistance
Support
USDINR
January
61.7125
62.7175
1.005
1.63%
427392
-63310
62.8258
62.8767
62.7492
EURINR
January
83.65
85.8225
2.1725
2.60%
31174
-15414
85.9000
86.0875
85.7325
GBPINR
January
101.3
104.1775
2.8775
2.84%
29248
-7937
103.7000
103.8375
103.5200
JPYINR
January
59.3425
61.2825
1.94
3.27%
7430
600
61.1900
61.6000
60.9100
Off Shore
Pair
Open
Close
1 Week Chg
%change
Pivot
Resistance
Support
Dollar
Index
80.4110
80.4440
0.033
0.04%
80.4357
80.4773
80.4023
EURUSD
1.3675
1.3683
0.0008
0.06%
1.3680
1.3693
1.3671
GBPUSD
1.6481
1.6504
0.0023
0.14%
1.6494
1.6516
1.6482
USDJPY
102.37
102.43
0.06
0.06%
102.25
102.72
101.95
Please refer to the disclaimer at the end of the report.
 Motilal Oswal Financial Services
Monday, January 27, 2014
USDINR:
Rupee depreciated around 2% against the dollar last
week, closing at 62.73. The RBI report recommending
bringing down consumer inflation to a target of 4 % is
raising concerns about economic growth in the near term,
fueling the expectations for interest rate being
unchanged. The bond yields remained high on speculation
that interest rates may stay high for a longer phase,
India’s monetary policy and FOMC rate decision this week
will give further direction to the prices in the short term.
Technical, USDINR has breached a downward sloping
trend line at 62.55 and formed a strong daily bullish
candle last Friday. Momentum is strong and the pair could
continue the rally towards previous high near 63.60/63.80
level. 62.55 should act as a strong support on the
downside. Only breach below 62.55 could resume the
downtrend.
EURINR:
EUR appreciated around 1% against the dollar to close at
1.3677. The demand for euro increase, after the euro
zone’s composite output index rose to a 31-month high of
53.2 and manufacturing activity in Germany expanded at
its fastest pace since May of 2011 this month, coming in
at 56.3 as against 54.6 previously, fueling expectations for
central banks to wind down stimulus programs such as
bond purchases going forward. The data of inflation from
Germany and Euro zone will give a further direction. On
the technical end, the pair EURINR rallied sharply last
week and closed near weekly high of 86.60 levels. If
sustains above 86.50, expect more upside towards
87.00/87.40. As long as it stays above 85.50, the pair
looks to move sideways to positive.
Please refer to the disclaimer at the end of the report.
 Motilal Oswal Financial Services
Monday, January 27, 2014
GBPINR:
GBP gained around 0.3% against the dollar last week,
closing at 1.6481. The demand for pound increased, after
the IMF said it was hiking the UK's 2014 growth forecast
to 2.4% from 1.9% in October. Also the industrial order
expectations fell to -2 this month from 12 in December.
UK will release its GBP numbers this week. On technical
front, GBPINR rallied sharply last week and closed near
weekly high of 104.79 levels. GBP INR is now moving
towards crucial downward sloping trend line resistance at
105.55. As long as below 105.55, expect profit booking
and pair could slide towards 103.30/103.00 again.
JPYINR:
YEN appreciated around 2% against the dollar, closing at
102.34. Yen was supported, after the BOJ kept monetary
policy unchanged and maintained its assessment that
Japan's economy "has continued to recover moderately."
Also, a huge stimulus announced in early 2013 by BOJ,
was prefers not to ease again unless clear evidence
emerges that a sales tax hike this April causes far more
damage than expected. On the other hand demand for
dollar was hit, after poor set of data from US. Technical,
the pair JPYINR has breached a downward sloping trend
line at 60.00 and closed the week well above the same.
For the week, strong support on the downside is at
60.95/60.15 while strong resistance is at 62.30/62.75. As
long as it stays above 60.15, buying on dips is advisable.
Please refer to the disclaimer at the end of the report.
 Motilal Oswal Financial Services
Monday, January 27, 2014
Economic Data
DATE
27-Jan
EVENT
Japan Trade Balance
US New Home Sales
US Services PMI
India RBI Meeting
28-Jan
UK GDP
US Durable Goods Order
US CB Consumer Confidence
US FOMC Meeting
30-Jan
Germany Unemployment Rate
US GDP
US Pending home sales
Japan unemployment Rate
31-Jan
Japan Industrial Production
EUR CPI
EUR Unemployment
IMPACT
MILD
HIGH
MILD
HIGH
HIGH
HIGH
HIGH
HIGH
MILD
HIGH
MILD
HIGH
MILD
HIGH
HIGH
For any details contact:
Currency Advisory Desk - +91 22 3958 3600
currencyresearch@motilaloswal.com
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