Monday, October 14, 2013
RBI Reference Rate
Pair
Last Closing
MTD (%)
YTD (%)
$/
61.157
-7.14%
11.54%
€/
82.7795
-4.91%
14.21%
£/
97.7656
-4.64%
9.57%
¥/
62.1500
-7.02%
-1.68%
The Indian rupee remained range bound for the
major part of the week and appreciated back to its
one month high levels after GoI announced that it
would support the bid to include Indian Bonds in
Global Bond indices. The trade balance number
released in early part of the week provided yet
another reason for home currency to surge against
all major currencies as imports declined by 18% and
exports increased 11%; across the Atlantic the debt
ceiling debate and partial shutdown took its toll on
dollar which saw hefty selling against rival
currencies, though the price action indicate that US
congress would ultimately reach a resolution to
avoid Government default. The continued shut down
in its 3
rd
week, yet again delayed releasing of
Economic data and forced traders to second guess
result outcome. The FOMC statement released on
last Wednesday indicated that most members were
in favor of tapering in current year, if economic data
turned supportive, this was instrumental in
providing stable platform to dollar but, the gains
were reversed on last trading session as Consumer
Confidence declined to its 8 month low causing
greenback to correct.
The Euro faced some selling pressure as light
economic calendar assured the 17 nation currency
swayed in tune with global fund activity, the only
significant data came out from Germany that
indicated economic slowdown. The Sterling also
declined after weak reading of Construction and
Manufacturing PMI. The sign of housing sector
slowdown prompted investors to book profit in GBP.
On Shore
Pair
Contract
Open
Close
1 Week Chg
%change
OI
OI change
Pivot
Resistance
Support
USDINR
October
62.0050
61.325
-0.68
-1.10%
455144
-3602
61.6967
62.2583
60.7633
EURINR
October
84
83.1875
-0.8125
-0.97%
41559
822
83.5367
84.5808
82.1433
GBPINR
October
99.3425
97.9475
-1.395
-1.40%
18180
-2776
98.7175
99.7825
96.8825
JPYINR
October
63.7725
62.3475
-1.425
-2.23%
6830
462
62.6758
64.0517
60.9717
Off Shore
Pair
Open
Close
1 Week Chg
%change
Pivot
Resistance
Support
Dollar
Index
80.0550
80.4120
0.357
0.45%
80.2813
80.7257
79.9677
EURUSD
1.3555
1.3541
-0.0014
-0.10%
1.3544
1.3604
1.3482
GBPUSD
1.6017
1.5954
-0.0063
-0.39%
1.5997
1.6081
1.5869
USDJPY
97.42
98.56
1.14
1.17%
97.90
99.25
97.21
Please refer to the disclaimer at the end of the report.
 Motilal Oswal Financial Services
Monday, October 14, 2013
USDINR:
The home currency gained a whole percentage against
dollar as positive news flow pushed rupee to trade near its
one month high against dollar. The home currency is
expected to preserve its strength as lack of economic data
release from US is expected to delay tapering and thereby
cap US bond yields. The only red flag in system come from
an overnight resolution which could raise debt ceiling and
thus lead to return of investor confidence in dollar. The
recent price action also remained indicative of such
possibility. The dollar index strengthened back to its 2
week and high and dollar remained higher despite
nomination of Janet Yellen as FED chair. The upcoming
week is expected to witness expansion in volatility as
Indian WPI and US Jobless claims along with several FED
member speech are expected to provide short term
guidance to the pair. The USDINR is expected to trade in
the range of 63.00 – 61.20 as markets are expected to roll
out mixed views while taking into consideration that US
Congress holding off markets as hostage prior to vote.
However, revision of debt ceiling would lead to
strengthening of greenback and drive pair towards 63.70
EURINR:
The Euro continued to decline against rupee for the second
straight week as investors confidence returned to dollar on
back of improved technical tone and possibility of early
resolution to avoid default. The 17 nation currency drifted in
tandem with global fund flows as lack of economic data
release prevented the major pair from anchoring itself. In
the ECB monthly review ECB President suggested that
Europe had bottomed out in first half, but failed to provide
forward guidance as German and French periphery economic
data confirmed stagnation for the 2
nd
month in a row. The
President also added that economic policy would remain
accommodative of lower interest rates and easy monetary
policy. EURUSD can test 1.3400 towards on lower side and is
expected to sustain blow 1.3580 against rupee the range is
expected at 82.50.00 – 84.00, with significant downside
bias. Close below support could pressure pair towards 81.30
Please refer to the disclaimer at the end of the report.
 Motilal Oswal Financial Services
Monday, October 14, 2013
GBPINR:
The sterling resumed its decline against rupee and dollar.
The currency dropped against most rival currencies on back
of weak economic data. The surprise reduction in
construction PMI and slowdown in housing sector prompted
investors to book profit in GBP as most shifter their positions
to avoid sterling exposure. The sterling however, failed to
bounce back from its one month’s low against rival
currencies despite data not being as weak as headline report
suggested. The upcoming week is expected to weigh heavily
on sterling fortunes as economic calendar indicates a busy
schedule for currency. The inflation, employment and
consumer spending number are expected to come out in line
with expectation. However, failure to register reduction in
unemployment could lead to another round of profit
booking. The GBPUSD is expected test 1.5450 in near term,
while the ran in between 97.00 - 99.00 with downside bias
JPYINR:
The yen had earlier improved against rupee but quickly
reversed its gains and fell back to 2 week low against
rupee. The decline came on back of BoJ monetary policy
outlook that suggested that central bank was satisfied with
current level of monetary policy and expected it to bolster
support to economy. In addition the improving equity
markets along with decline in bond yields also provided
support to the currency. The BoJ is expected to release
another tranche of easing if tapering is delayed beyond
December. While the carry currency is expected to range
within 96.00 – 98.00 against dollar JPYINR is expected to
remain in zone of 61.80 – 63.25 with mild upwards bias.
However, the breach of support could propel pair
downwards to 60.90
Please refer to the disclaimer at the end of the report.
 Motilal Oswal Financial Services
Monday, October 14, 2013
DATE
14-Oct
Economic Data
EVENT
China CPI
China PPI
India WPI
EU Industrial Production
UK CPI
UK PPI
Japan Industrial Production
German ZEW Business Sentiment
US REDBOOK
UK Claimant Count
UK Unemployment Rate
EU Core CPI
EU Trade Balance
US Mortgage Applications
UK Retail Sales
EU Current Account
US Initial Jobless Claims
US Continuing Jobless Claims
China GDP
China Industrial Production
India Forex Reserve
US CB Leading Index
15-Oct
16-Oct
17-Oct
18-Oct
IMPACT
HIGH
HIGH
MILD
MILD
HIGH
HIGH
MILD
HIGH
MILD
HIGH
MILD
MILD
MILD
MILD
HIGH
LOW
HIGH
MILD
HIGH
HIGH
LOW
LOW
For any details contact:
Currency Advisory Desk - +91 22 3958 3600
currencyresearch@motilaloswal.com
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