Currencies Daily Report

Monday| September 10, 2012

Content
Overview US Dollar Euro GBP JPY Economic Indicators
Overview:

Research Team
Fundamental Team Nalini Rao - Sr. Research Analyst Nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135 Anish Vyas - Research Associate anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Currencies Daily Report

Monday| September 10, 2012

Highlights
US Non-Farm Employment Change declined to 96000 in August Japan Final GDP grew at slow pace of 0.2 percent in Q2 of 2012. US Unemployment Rate declined to 8.1 percent in the last month. German Industrial Production increased by 1.3 percent in July.

Market Highlights (% change)

Last NIFTY SENSEX DJIA S&P FTSE KOSPI BOVESPA NIKKEI 5342.1 17683.7 13306.64 1437.9 16110.3 1929.6
58321.2

as on September 7, 2012 Prev. day 2.0 1.9 0.1 0.4 2.1 2.6
2.6

WoW 1.6 1.5 1.6 2.2 6.7 1.3

2.2

MoM 0.4 0.7 0.7 2.6 10.7 -0.9

-1.6

YoY 3.7 3.0 17.8 20.0 9.2 4.5

1.2

Asian equities are trading on mixed note amidst expectation of further monetary easing by the global central bankers after weak US nonfarm payroll data and decline in the GDP numbers from Japan. US Non-Farm Employment Change declined by 45,000 to 96,000 in August as against a previous rise of 141,000 in July. Unemployment Rate declined to 8.1 percent in last month from previous rise of 8.3 percent in July.

8871.7 96.42 1737.50 3363.30 7982.00 483.51 99.64

2.2 0.9 2.0 3.1 3.5 2.0 -0.3

-0.1 -0.1 3.1 7.2 5.1 2.1 0.3

-0.2 3.8 7.3 19.9 6.6 5.9 -0.2

0.9 8.3 -6.3 -20.8 -12.4 -22.4 3.0

US Dollar Index
The US Dollar Index (DX) continued to decline for the second consecutive week due to positive outcome from the European Central bank (ECB) meeting held on September 6, 2012 along with optimism that US Federal Reserve policy makers might adopt stimulus measures soon to boost the economy. Weak US nonfarm payroll data in the last week raised the expectations of the investors for the further monetary easing soon. This led to fall in the demand for the low yielding currency that is DX. US equities traded on a firm note taking positive cues from the ECB meeting held in the last week amidst raising expectation that US Federal Reserve policy makers might adopt stimulus measures to boost the economy. The currency declined 1.2 percent week on week and closed at 80.23 after touched a weekly low of 80.14 on Friday.

Nymex Crude (Oct'12) -$/bbl Comex Gold (Dec12) - $/oz Comex Silver(Dec12) $/oz LME Copper (3 month) -$/tonne CRB Index (Industrial) G-Sec -10 yr @7.8% - Yield

Source: Reuters

US Dollar (% change)
Last Dollar Index US $ / INR (Spot) US $ / INR Sep12 Futures (NSE) US $ / INR Sep12 Futures (MCX-SX) 80.23 55.36 55.54 55.54 Prev. day -1.0 0.5 -0.61 -0.62

as on September 7, 2012 WoW -1.2 0.3 -0.43 -0.45 MoM -2.9 -0.1 0.50 0.50 YoY 5.1 -16.6 20.07 20.05

Dollar/INR
The Indian Rupee appreciated by 0.3 percent in the last week. The currency appreciated taking cues from upbeat global and domestic market sentiments along with weakness in the DX. Additionally, expectations of unlimited bond buying plan by the European Central Bank (ECB) policymakers to curtail Euro Zone debt crisis also supported an upside in the currency. However, sharp upside in the currency was restricted as a result of dollar demand from the oil companies. It touched an intra-day high of 55.62 in the last week and closed at 55.36 on Friday. For the current month, FII outflows totaled at Rs 98.30 crores till 7 September 2012. While year to date basis, net capital inflows stood at Rs 63,168.0 crores till 7th September 2012. Outlook From the intra-day perspective, we expect Rupee to appreciate taking positive cues from global markets after constructive outcome from the ECB meeting held in the last week and anticipation amongst market participants that further stimulus measures would be taken soon by the global central bankers to boost the economy. Weakness in the DX is also expected to help rupee to appreciate in todays session.
th

Source: Reuters

Technical Chart USD/INR

Source: Telequote

Technical Outlook
Trend US Dollar/INR Sep12 (NSE/MCX-SX) Down

valid for September 10, 2012 Support 55.4/55.28 Resistance 55.65/55.8

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Currencies Daily Report

Monday| September 10, 2012

Euro/INR
The Euro increased by 1.9 percent in last week due positive outcome from the European Central Bank meeting held in the last week wherein leaders agreed on purchase of unlimited bond buying plan to contain the Euro zone debt. Also, favorable economic data from the region added to the gains of currency. It touched a weekly high of 1.2817 and closed at 1.2815 on Friday. German Trade Balance was at a surplus of 16.1 billion Euros in July as against previous surplus of 16.3 billion Euros a month ago. French Gov Budget Balance declined by 85.5 billion Euros in July from previous decline of 56.7 billion Euros a month earlier. French Trade Balance was at a deficit of 4.3 billion Euros in July as compared to previous deficit of 6.1 billion Euros in prior month. German Industrial Production increased by 1.3 percent in July with respect to decline of 0.4 percent in previous month. Outlook In todays session we expect Euro to trade rangebound on the back of positive outcome of the ECB meeting held in the last week along with weakness in the DX. However, expectation of weak data from the economy may cap sharp gains. Technical Outlook
Trend Euro/INR Sep12 (NSE/MCX-SX) Up 70.3/70.15 70.55/70.65 valid for September 10, 2012 Support Resistance

Euro (% change)
Last Euro /$ (Spot) Euro / INR (Spot) Euro / INR Sep12 Futures (NSE) Euro / INR Sep12 Futures (MCX-SX) 1.2815 70.96 70.47 70.5 Prev. day 1.5 -0.9 0.07 0.11

as on September 7, 2012 WoW 1.9 -1.6 0.52 0.56 MoM 4.3 -4.4 2.76 2.78 YoY -7.7 -9.6 8.38 8.45

Source: Reuters

Technical Chart Euro

Source: Telequote

GBP (% change)
Last Prev. day 0.5 0.1 -0.43

as on September 7, 2012

WoW 0.9 -0.6 0.13

MoM 2.0 -2.2 2.24

YoY 0.3 -20.2 19.52

GBP/INR
On a weekly basis, Pound appreciated 0.9 percent on the back of favorable economic data from the country along with up0beat global market sentiments. Additionally, weakness in the DX also supported upside in the prices. It touched a high of 1.6033 in the last week and closed at 1.6005 on Friday. UK's Manufacturing Production rose by 3.2 percent in July as against a decline of 2.9 percent a month ago. Producer Price Index (PPI) Input increased by 2 percent in August from previous rise of 1.3 percent in July. Consumer Inflation Expectations was at 3.2 percent in Q2 of 2012 as compared to rise of 3.7 percent in Q1 of 2012. Industrial Production grew by 2.9 percent in July with respect to decline of 2.5 percent a month ago. PPI Output was at 0.5 percent for the month of August. Outlook We expect Pound to trade rangebound due to mixed global market sentiments along with weakness in the DX. Technical Outlook valid for September 10, 2012
Trend GBP/INR Sep 12 (NSE/MCX-SX) Down Support 88.22/88.05 Resistance 88.6/88.75

$ / GBP (Spot) GBP / INR (Spot) GBP / INR Sep12 Futures (NSE) GBP / INR Sep12 Futures (MCX-SX)

1.6005 88.60 88.42

88.41

-0.43

0.13

2.26

19.52

Source: Reuters

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Currencies Daily Report

Monday| September 10, 2012

JPY/INR
The Japanese Yen depreciated by 0.2 percent in the last week on account of rise in risk appetite in the global markets which led to fall in demand for the low yielding currency. Additionally, unfavorable economic data also added downside pressure on the currency. It touched a low of 79.02 during the week and closed at 78.24 on Friday. Japans Current Account was at a surplus of 0.34 trillion Yen in July as against a previous surplus of 0.77 trillion Yen a month ago. Final Gross Domestic Product (GDP) grew at slow pace of 0.2 percent in Q2 of 2012 from previous rise of 0.3 percent in Q1 of 2012. Bank Lending was at 0.9 percent in August as compared to rise of 0.7 percent in July. Final GDP Price Index declined by 0.9 percent in lat quarter with respect to decline of 1.1 percent in Q1 of 2012. Outlook In todays trade, we expect Yen to depreciate on the back of rise in risk appetite in the global markets which might reduce the demand for the low yielding currency. Further, unfavorable GDP data is also expected to depreciate the currency in todays session.

JPY (% change)
Last 78.24 0.707 70.28 70.29 Prev day -0.8 -0.2 -1.22 -1.19

as on September 7, 2012 WoW -0.2 0.2 -0.93 -0.91 MoM 0.0 -0.2 -0.28 -0.29 YoY 1.0 -18.6 17.37 17.33

JPY / $ (Spot) JPY / INR (Spot) JPY 100 / INR Sep12 Futures (NSE) JPY 100 / INR Sep12 Futures (MCX-SX)

Source: Reuters

Technical Chart JPY

Source: Telequote

Technical Outlook
Trend JPY/INR Sep 12 (NSE/MCX-SX) Down

valid for September 10, 2012 Support 70.05/69.80 Resistance 70.70/71.15

Economic Indicators to be released on September 10, 2012

Indicator Current Account Final GDP q/q Trade Balance New Loans French Industrial Production m/m Sentix Investor Confidence Country Japan Japan China China Euro Euro Time (IST) 5:20am 5:20am Tentative 10 14
th th

Actual 0.34T 0.2% 26.7B -

Forecast 0.39T 0.3% 18.9B -

Previous 0.77T 0.3% 25.1B 540B 0.0% -30.3

Impact High Medium High Medium Medium Medium

12:15pm 2:00pm

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