Angel Broking Ltd.web.angelbackoffice.com/Research_ContentManagement/commodit… · Monday, June...

Monday, June 27, 2016

Currency Daily Report

Friday, December 16, 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

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

Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company

does not warrant its accuracy, completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation

to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any

purpose without prior permission from “Angel Broking Ltd”. Your feedback is appreciated on [email protected]




MARKET HIGHLIGHTS (% change) as on 15-Dec-16

INDICES LAST CHANGE WOW MOM

NIFTY 8153.6 -0.35 0.6 -1.7

SENSEX 26519.1 -0.31 1.1 -1.1

DJIA 19852.2 0.30 1.2 5.0

S&P 2262.03 0.39 0.70 3.61

FTSE 6999.0 0.7 -59.9 3.3

KOSPI 2036.7 -0.3 0.3 3.1

BOVESPA 58497.8 0.2 -3.6 -4.2

NIKKEI 19273.8 33.2 -0.1 6.1

Source: Reuters

COMMODITY HIGHLIGHTS (% change) as on 15-Dec-16

INDICES LAST CHANGE WOW MOM

NYMEX CRUDE - $/BBL 50.90 -0.3 2.3 17.3

COMEX GOLD - $/OZ 1126.90 -0.1 -2.8 -6.8

COMEX SILVER - $/OZ 17.15 1.4 0.7 2.3

LME COPPER (3M) -$/TONNE 5732.00 0.2 -0.9 -4.1

Source: Reuters

CURRENCY HIGHLIGHTS (% change) as on 15-Dec-16

CURRENCY LAST CHANGE WOW MOM

DX 103.05 1.26 2.78 2.1

USDINR 67.85 -0.588 -0.62 -0.1

EURUSD 1.0412 -1.17 -3.15 -3.0

GBPUSD 1.2415 -1.18 -1.6 -0.6

USDJPY 118.16 0.97 3.9 9.0

Source: Reuters

Technical Chart – USDINR

Source: Reuters

Daily INR= 28-11-2016 - 16-12-2016 (GMT)

Cndl, INR=,

15-12-2016, 67.7600, 67.8850, 67.6779, 67.8598

+0.4098, (+0.61%)

Price

/USD

67

67.5

68

68.5

69

67.8598

28 29 30 01 02 05 06 07 08 09 12 13 14 15 16Nov 16 December 2016

MARKET OVERVIEW

After trading lower yesterday, markets across the globe are

reviving finally. Investors sold bonds and gold which are safe-

haven assets and moving towards riskier assets which boosted

the price of stocks.

US DOLLAR INDEX (USD) The US Dollar Index traded higher by 1 percent in yesterday’s

trading session as markets discount FOMC monetary policy

outcome. The US Federal Reserve raised interest rates for the

second time since 2008 crisis. The target federal funds rate was

hiked by 25 basis points to between 0.50 percent and 0.75

percent. Not only this, the US Fed Chairwoman Janet Yellen

stated that this move was a modest adjustment in the path of the

fed funds rate; indicating more rate hikes in the future. Three rate

hikes are predicted for 2017 from two.

She insisted that the US economy especially the labor market was

in decent shape and does not require fiscal policy to provide

stimulus for full employment. On Trump’s pledge to roll back

regulations brought in since 2008, she defended by saying that it

was introduced to avoid another “devastating financial crisis”.

Moreover, the Fed chair indicated she was going nowhere until

her first term expires.

INDIAN RUPEE (USDINR) The Indian Rupee depreciated by 0.58 percent yesterday owing to

strength in the US Dollar Index after the US Federal Reserve in

Dec’16 FOMC meet finally hiked its interest rates by 25 basis

points. This kept the American currency higher in turn denting the

demand for the Indian Rupee. However, the RBI intervened via

state-owned banks to stabilize the Indian Rupee with the help of

its forex reserves.

Markets are still discounting the move by the RBI of keeping the

benchmark repo rate unchanged at 6.25 percent which boosted

the foreign inflows. The RBI governor feels that India’s inflation

rate has risks from volatile crude price and the unclear effects of

the withdrawal of high denomination currency notes.

OUTLOOK

USDINR is expected to depreciate in today’s trading session as the

US Federal Reserve’s decision of increasing interest rates and

predicting three rate hikes from two for 2017 will boost the

demand for the American currency in turn keeping the INR

pressurized. However, any unusual movement will prompt the RBI

to intervene the markets.

Technical Outlook valid for 16-Dec-16

Currency Futures Trend S1 S2 R1 R2

USDINR Dec’16 (NSE) Up 67.70 67.50 68.10 68.30




EURO (EURUSD)

The policy outcome of US Federal Reserve has affected global

markets and its currencies. The Euro currency traded lower by

more than 1 percent yesterday as the US dollar rallied to its

strongest level since 2003 against the euro.

Furthermore, markets have not forgotten the ECB Monetary policy

outcome where the committee extended its bond-buying program

until Dec’17 and surprised the markets by announcing to buy

bonds worth €60 billion a month from Apr’17. The bank also kept

its key interest rate unchanged at zero as expected. Draghi said

that purchasing bonds below the bank’s deposit rate would result

in a loss for the central bank but highlighted that the stability

outweighed profits.

OUTLOOK

EURINR is expected to trade sideways to higher as vote in the

Greek parliament saw some unlikely allies back the government’s

Christmas bonus to pensioners. However, strength in the US Dollar

will add to the woes.



EURINR Dec’16 (NSE) Sideways 70.75 70.55 71.15 71.40

STERLING POUND (GBPUSD) Sterling pound traded lower by more than 1 percent yesterday

after the BoE kept the interest rates unchanged at 0.25 percent in

Dec’16 monetary policy meeting and pointed towards fall in future

inflation rate. This dented the market confidence and kept the

cable pressurized. Moreover, strength the US Dollar added to the

woes.

Chancellor Philip Hammond has backed a transitional deal for

Brexit saying it would be "helpful" to allow longer than two years

for the UK's EU exit. This was one of the strongest signals from the

government that the Brexit process could take a lot longer than

the two years needed for the official Article 50 exit process to be

completed.

OUTLOOK

Sterling Pound is expected to trade lower as markets discount the

BoE monetary policy outcome where the BoE kept the interest

rates un in Dec’16 monetary policy meeting and pointed towards

fall in future inflation rate.



GBPINR Dec’16 (NSE) Sideways 84.60 84.40 85.10 85.20

Technical Chart – EURINR

Source: Reuters

German ZEW Economic Sentiment remained

unchanged at 13.9 in November’16.

Technical Chart – GBP/INR

Source: Reuters

Inflation rate for the month of November’16 surged

by 1.2 percent from previous month’s 0.9 percent.

Average Earnings Index increased by 2.5 percent in

November’16 from 2.4 percent in September’16.

Claimant Count Change declined by 2.4K in

November’16 from previous month 13.3K.

Daily EURINR= 23-11-2016 - 15-12-2016 (GMT)

Cndl, EURINR=,

15-12-2016, 71.1100, 71.1900, 70.8000, 70.8100,

-1.0300, (-1.43%)

Price

INR

71

71.5

72

72.5

73

70.8100

23 24 25 28 29 30 01 02 05 06 07 08 09 12 13 14 15November 2016 December 2016

Daily GBPINR=R 24-11-2016 - 16-12-2016 (GMT)

Cndl, GBPINR=R,

15-12-2016, 84.717, 85.173, 84.373, 84.852,

+0.121, (+0.14%)

Price

INR

84.5

85

85.5

86

86.5

84.852

24 25 28 29 30 01 02 05 06 07 08 09 12 13 14 15 16November 2016 December 2016




JAPANESE YEN (JPY/USD) Japanese Yen depreciated by 0.9 percent yesterday; all thanks to

the US Feds decision to hike interest rates. This boosted the

demand for the American currency which hit its highest level in

nearly 14 years at 102.35 in turn keeping the Yen currency

pressurized.

The Japanese government bonds strengthened Wednesday after

the Bank of Japan (BoJ) in its daily bond buying operations

purchased more of super-long bonds to keep yields curve towards

the central bank’s target range. The BoJ in its daily bond-buying

operations purchased more of super-long bonds as compared to

190 billion yen on December 9. It purchased 120 billion yen of

JGBs with over 25 years left to maturity. It also offered to buy 200

billion yen of JGBs with between 10 and 25 years left to maturity.

OUTLOOK

JPYINR is likely to depreciate owing to strength in DX post US rate

hike and rise in super-long JGB yields by the BoJ which could

cause further volatility in Japanese markets.



JPYINR Dec’16 (NSE) Down 57.20 57.00 57.60 57.80

Technical Chart – JPY/INR

Source: Reuters

Tankan Manufacturing Index surged to 10 for

quarter ending September’16 from previous quarter

6.

Tankan Non-Manufacturing Index for quarter

ending September’16 remained unchanged at 18.

Daily JPYINR=R 25-11-2016 - 15-12-2016 (GMT)

Cndl, JPYINR=R,

15-12-2016, 57.6102, 57.7806, 57.2095, 57.2622,

-0.3530, (-0.61%)

Price

INR

58

60

62

64

57.2622

25 28 29 30 01 02 05 06 07 08 09 12 13 14 15Nov 16 December 2016

Economic indicators to be released on 16-Dec-16

INDICATOR COUNTRY TIME (IST) ACTUAL FORECAST PREVIOUS IMPACT

Final CPI y/y Euro 3:30pm - 0.6% 0.6% Medium

Building Permits US 7:00pm - 1.24M 1.26M High

Housing Starts US 7:00pm - 1.23M 1.32M Medium




Research Team

Heena Imtiaz Naik

Research Associate

Currency

[email protected]

(022) 2921 2000 Extn :6104

Prathamesh Mallya

Chief Analyst

Non-agri Commodity & Currency

[email protected]

(022) 3935 8134 Extn :6134

Harsh Rawat

Technical Analyst-Currency

[email protected]

(022) 3935 8141 Extn: 6141

Kaynat Chainwala

Research Analyst

[email protected]

(022) 3935 8136 Extn :6136

Thank You

Angel Broking Ltd.web.angelbackoffice.com/Research_ContentManagement/commodit… · Monday, June...

Documents

Transcript of Angel Broking Ltd.web.angelbackoffice.com/Research_ContentManagement/commodit… · Monday, June...