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Monday, June 27, 2016

Currency Daily Report

Friday, July 29, 2016

CONTENTS

Market Overview

Daily Analysis with fundamental and technical outlook

US Dollar

Indian Rupee

Euro

Sterling Pound

Japanese Yen

Important events for the day

INR likely to trade lower on BoJ stimulus action

Euro to trade lower owing to important economic data releases

Pound to trade higher on robust GDP data from the nation

BoJ infuses stimulus in the market that will keep the JPY pressurized

For further assistance please refer to the full report




MARKET HIGHLIGHTS (% change) as on 28-Jul-16

INDICES LAST CHANGE WOW MOM

NIFTY* 8666.3 0.59 1.8 5.6

SENSEX* 28208.6 0.66 1.8 5.5

DJIA 18456.4 -0.09 -0.3 2.9

S&P 2170.0 0.2 5.1 5.4

FTSE 6721.1 -0.4 -61.5 3.0

KOSPI 2021.1 -0.1 0.4 1.7

BOVESPA 58497.8 0.2 3.3 11.3

NIKKEI 16476.8 13.8 -0.1 5.2

Source: Reuters

COMMODITIY HIGHLIGHTS (% change) as on 28-Jul-16

INDICES LAST CHANGE WOW MOM

NYMEX CRUDE - $/BBL 41.14 -1.9 -8.1 -17.5

COMEX GOLD - $/OZ 1334.60 0.2 0.9 -0.2

COMEX SILVER - $/OZ 20.16 1.0 2.6 3.2

LME COPPER (3M) -$/TONNE 4896.50 1.0 -1.6 -18.1

Source: Reuters

CURRENCY HIGHLIGHTS (% change) as on 28-Jul-16

CURRENCY LAST CHANGE WOW MOM

DX 96.72 -0.3 -0.3 0.5

USDINR 67.00 0.1 0.2 0.6

EURUSD 1.1074 0.2 0.5 -0.4

GBPUSD 1.3163 -0.43 -0.5 -1.9

USDJPY 105.24 -0.14 -0.5 2.4

Source: Reuters

Technical Chart – USDINR

Source: Reuters

Daily INR= 25-05-2016 - 28-07-2016

Cndl, INR=, 26-07-2016, 67.4048, 67.4283, 67.3767, 67.4033,

+0.0010, (0.00%)

Price

66.6

66.9

67.2

67.5

67.8

68.1

67.4033

30 06 13 20 27 04 11 18 25May 16 June 2016 July 2016

MARKET OVERVIEW

Asian markets are trading on a negative note as investors play

safe prior to the BoJ Monetary Policy Meeting that is to be

scheduled during the day. Markets expect aggressive easing by

the BoJ so as to boost the Japanese economy.

US DOLLAR INDEX (USD)

The American currency plunged by 0.3 percent in yesterday’s

trading session as markets discounted the recent FOMC monetary

policy review. The Federal Reserve made a comment that the

labour market was finally getting back on track and near term

risks to the American economy had started to fade. However, the

inflation rate still lingered under the 2 percent target which

prompted the US policymakers to keep the interest rates on hold.

There was no major volatility in the DX since markets were not

expecting a rate hike this time but wanted clues as to when the

Feds would go for a rate hike in times of uncertainty like the post-

Brexit effects and the upcoming US Presidential elections.

The American currency made an intraday low of 96.25 and closed

at 96.72.

INDIAN RUPEE (USDINR)

The Indian rupee appreciated by 0.1 percent yesterday owing ot

weakness in the American currency after the US Fed kept the key

interest rates on hold. Moreover, month end dollar selling by

exporters and banks amid weaker dollar in the overseas markets

also helped the rupee to stand strong.

Domestic markets i.e. Sensex and Nifty traded higher as markets

discounted the news of BoJ infusing huge monetary stimulus

package which led to a big rally. Moreover, the state ministers

have agreed to implement the GST bill on the principle that the

tax rate will be lower than the current levels.

The Indian rupee made an intraday high 66.93 and closed at 67.00

levels on Thursday.

OUTLOOK

Rupee is likely to trade negative as markets indulge in speculation

prior to the BoJ monetary Policy review that is to be held anytime

during the day. Markets expect aggressive easing by the BoJ so as

to boost the Japanese economy. this will keep the Indian Rupee

pressurized.

Technical View valid for 29-Jul-16

Currency Futures Trend S1 S2 R1 R2

USDINR July’16 (NSE/MSE) Sideways 67.10 66.95 67.40 67.55




EURO (EURUSD)

Euro currency traded higher by 0.2 percent in yesterday’s trading

session on account of robust release of economic datasets from

the nation. Inflation in Germany has climbed higher more than

the expected levels thereby infusing optimism over the strength

of the Euro-zone’s largest economy.

According to a recent report, money circulation in the euro-zone

economy has risen thereby indicating that there has been a surge

in lending.

Furthermore, US Dollar index weakened after the US Feds kept

the interest rates unchanged in the recent FOMC meeting which

provided some support to the shared currency.

Euro currency made an intraday high of 1.1118 and closed at

1.1074 levels on Thursday.

OUTLOOK

Euro is expected to trade lower owing to cautiousness in the

market prior to the important economic data releases from the

nation that is likely to keep the Euro currency volatile.



EURINR July’16 (NSE/MSE) Sideways 73.77 73.62 74.07 74.22

STERLING POUND (GBPUSD)

Sterling Pound declined by 0.43 percent yesterday as recent

strength in the currency prompted the traders to book profits.

Moreover, lack of important economic data and events from the

nation kept the trading volumes light.

However, sharp losses were capped as markets discounted the

robust release of GDP data from the nation that came better than

the forecasted levels which was a surprise given Britain’s latest

exit from European Union.

The second lord of the Treasury, Chancellor Philip Hammond

stated that the recent GDP figures show that the fundamentals of

the British economy were strong in a period of adjustment

following the decision to leave the EU.

OUTLOOK

Sterling Pound is expected to trade lower as lack of important

economic data sets from the nation today will prompt the

investors to focus on the Aug’16 BoE Monetary Policy meeting.



GBPINR July’16 (NSE/MSE) Sideways 88.04 87.86 88.35 88.51

Technical Chart – EURINR

Source: Reuters

German Prelim CPI surged by 0.3 percent in June’16 from

0.1 percent in May’16

Spanish Unemployment Rate declined to 20 percent in

June’16 from previous months 21.0 percent

Final CPI of the Euro-zone remained unchanged at 0.1

percent for the month of Jun’16

Technical Chart – GBP/INR

Source: Reuters

CPI came on a good note at 0.5 percent in June’16 from

0.3 percent in May’16

Retails sales declined by 0.9 percent in June ’16 from

previous months 0.9 percent.

Average Earnings Index surged by 2.3 percent in June’16

as against 2.0 percent in May’16

Unemployment Rate falls to 4.9 percent from 5 percent

Outlook for the UK banking sector was now ‘negative’

from ‘stable’ - Moody’s

Daily EURINR= 24-05-2016 - 27-07-2016

Cndl, EURINR=, 25-07-2016, 73.6500, 74.0800, 73.6400, 73.9700,

+0.3200, (+0.43%)

Price

73.5

74

74.5

75

75.5

76

76.5

73.9700

30 06 13 20 27 04 11 18 25May 16 June 2016 July 2016

Daily GBPINR=R 25-05-2016 - 28-07-2016

Cndl, GBPINR=R, 26-07-2016, 88.533, 88.600, 88.155, 88.346,

-0.221, (-0.25%)

Price

87

90

93

96

99

102

88.346

30 06 13 20 27 04 11 18 25May 16 June 2016 July 2016




JAPANESE YEN (JPY/USD)

Japanese yen appreciated by 0.14 percent yesterday on account

of US Dollar weakness after the US Federal Reserve kept the key

interest rates unchanged in the recent FOMC Monetary policy

review.

Markets have indulged into increased speculation and

expectation of a huge monetary stimulus by the Bank of Japan

policymakers in its today’s monetary policy meeting. This has led

to volatile swings in Japanese Yen. According to a Bloomberg poll,

78 percent of analysts expect that the Bank of Japan will expand

easing this week. An expand in easing will most likely boost the

economy of Japan followed by a deeper cut in the negative

interest rate applied to a portion of the money that commercial

banks deposit at the BoJ.

OUTLOOK

Japanese yen is expected to trade negative as markets discount

the BoJ Monetary Policy review where the policymakers

increased their stimulus program and kept the key interest rates

unchanged.



JPYINR July’16 (NSE/MSE) Sideways 63.51 63.35 63.82 63.98

Technical Chart – JPY/INR

Source: Reuters

Bank of Japan said it would buy ¥6 trillion worth of

exchange-traded funds annually, up from ¥3.3 trillion

previously, in an attempt to stoke inflation and

economic growth.

It said it would leave its asset-purchase target at ¥80

trillion a year. The central bank also left a key interest

rate on bank reserves unchanged at minus 0.1%.

Daily JPYINR=R 23-05-2016 - 28-07-2016

Cndl, JPYINR=R, 26-07-2016, 63.6952, 64.4225, 63.6411, 64.2671,

+0.5658, (+0.89%)

Price

60

61

62

63

64

65

66

67

68

64.2671

23 30 06 13 20 27 04 11 18 25May 2016 June 2016 July 2016

Economic indicators to be released on 29-Jul-16

Indicator Country Time (IST) Actual Forecast Previous Impact

Household Spending y/y Japan 5:00am - -0.4% -1.1% Medium

Tokyo Core CPI y/y Japan 5:00am - -0.4% -0.5% Medium

Retail Sales y/y Japan 5:20am - -1.2% -2.1% Medium

Monetary Policy Statement Japan Tentative - - - High

BOJ Outlook Report Japan 10:30am - - - High

German Retail Sales m/m Euro 11:30am - 0.0% 0.9% Medium

BOJ Press Conference Japan Tentative - - - High

Spanish Flash CPI y/y Euro 12:30pm - -0.5% -0.8% Medium

Spanish Flash GDP q/q Euro 12:30pm - 0.7% 0.8% Medium

Net Lending to Individuals m/m UK 2:00pm - 4.2B 4.3B Medium

CPI Flash Estimate y/y Euro 2:30pm - 0.1% 0.1% Medium

Core CPI Flash Estimate y/y Euro 2:30pm - 0.9% 0.9% Medium

Prelim Flash GDP q/q Euro 2:30pm - 0.3% 0.6% Medium

Advance GDP q/q US 6:00pm - 2.6% 1.1% High

Advance GDP Price Index q/q US 6:00pm - 1.9% 0.4% Medium

Employment Cost Index q/q US 6:00pm - 0.6% 0.6% Medium

Chicago PMI US 7:15pm - 54.3 56.8 Medium

Revised UoM Consumer Sentiment US 7:30pm - 90.2 89.5 Medium




Research Team

Heena Imtiaz Naik

Research Associate

Currency

[email protected]

(022) 2921 2000 Extn :6104

Prathamesh Mallya

Sr. Research Analyst

Non-agro Commodity & Currency

[email protected]

(022) 3935 8134 Extn :6134

Harsh Rawat

Technical Analyst

Currency

[email protected]

(022) 3935 8141

Kaynat Chainwala

Research Analyst

[email protected]

(022) 3935 8136 Extn :6136

Thank You

Angel Broking Ltd.

Registered Office: G-1, Ackruti Trade Centre, Rd. No. 7, MIDC, Andheri (E), Mumbai - 400 093. Corporate Office: 6th Floor, Ackruti Star, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 2921 2000 Currency: INE231279838 / MCX Currency SEBI Regn No: INE261279838 / Member ID: 10500

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