Currencies Daily Report

Wednesday| December 19, 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 Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Currencies Daily Report

Wednesday| December 19, 2012

Highlights
US Current Account was at a deficit of $108 billion in Q3 of 2012. Indias RBI kept Repo & reserve repo rates unchanged at 8 % & 7 %. UKs CPI remained unchanged at 2.7 percent of November. Asian markets are trading on a firm note on optimism that US law makers might be able to resolve the fiscal cliff issue of the nation and expectation that the Japans new government might announce stimulus measures to boost the economy. Indias Reserve Bank of India (RBI) kept the Repo & reserve repo rates unchanged at 8 percent and 7 percent respectively. Even Cash Reserve Ratio (CRR) was left unchanged at 4.25 percent. US Current Account was at a deficit of $108 billion in Q3 of 2012 as against a previous deficit of $118 billion in previous quarter. National Association of Home Builders (NAHB) Housing Market Index rose by 2 points to 47-mark in December from earlier rise of 45-level in November.

Market Highlights (% change)

Last NIFTY SENSEX DJIA S&P FTSE KOSPI BOVESPA NIKKEI Nymex Crude (Jan13) - $/bbl Comex Gold (Dec12) - $/oz Comex Silver(Dec12) $/oz LME Copper (3 month) -$/tonne CRB Index (Industrial) G-Sec -10 yr @7.8% Yield
100 0.0 5896.8 19364.8 13350.96

as on December 18, 2012 Prev. day

0.7 0.6 0.9

WoW
0.0 -0.1 0.8

MoM
5.8 5.8 6.1

YoY
26.8 25.0 12.5

1446.8
16155.1 1993.1

1.1
0.9 0.5

1.3
3.7 1.4

6.4
8.7 7.1

18.6
10.9 8.3

60460.7 9923.0 85.93 1669.50 3159.50 8010.25

7.4 1.0 0.3 -1.6 -1.9 -0.5

1.4 -0.1 0.0 -2.3 -4.1 -1.0

9.1 10.0 -1.0 -2.6 -2.4 5.2

7.8 18.1 -8.3 4.6 6.7 8.8

US Dollar Index
US Dollar Index (DX) continued to trade lower and ended 0.2 percent down in yesterdays session. Signs of progress amongst the US law makers over the fiscal cliff issue led to positive global market sentiments and thereby rise in the risk appetite of the investors. This resulted in decline in the demand for the low yielding currency that is US Dollar Index (DX). Speaker of the House John Boehner proposed budget offer to President Barack Obama that would increase taxes by $1.2 trillion and boost tax rates for those earning more than $4,00,000 a year. US equities gained on the back of optimism that US law makers might be able to resolve the fiscal cliff issue of the nation. Favorable economic data from the nation also supported an upside in the equities. The index touched an intra-day low of 79.37 and closed at same levels on Tuesday.

0.2

0.3

-2.6

Source: Reuters

US Dollar (% change)
Last Dollar Index US $ / INR (Spot) US $ / INR Dec12 Futures (NSE) US $ / INR Dec12 Futures (MCX-SX)
79.37 54.92

as on December 18, 2012 Prev. day

-0.2 -0.1

WoW
-0.9 -1.2

MoM
-2.4 0.4

YoY
-1.1 -4.4

55.01 55.01

0.10 0.11

0.97 0.98

-0.56 -0.55

4.10 4.11

Dollar/INR
The Indian Rupee depreciated 0.1 percent on Tuesday as the Reserve Bank of India kept the repo rates and cash reserve ratio of the country steady at 8 percent and 4.25 percent respectively. However, some weakness in the rupee was witnessed towards the end of the session on the back of selling of dollars tracking firmness in the global markets erased some of the depreciation in the currency. The rupee closed at 54.92 after touching a low of 5505 on Tuesday. For the current month FII inflows totaled at Rs. 14,853.20 crores till th 18 December 2012. While year to date basis, net capital inflows stood th at Rs. 1,11,8125.20 crores till December 18 2012. Outlook

Source: Reuters

Technical Chart USD/INR

Source: Telequote

From the intra-day perspective, we expect Indian Rupee to appreciate on the back of firm Asian markets coupled with weakness in the DX. There are also expectations that the central bank might improve the liquidity into the market through open market operations which might boost the sentiments.

Technical Outlook
Trend US Dollar/INR Dec12 (NSE/MCX-SX) Sideways

valid for December 19, 2012 Support 54.80/54.60 Resistance 55.20/55.35

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Currencies Daily Report

Wednesday| December 19, 2012

Euro/INR
Euro ended 0.5 percent higher on a back of positive global market sentiments along with weakness in the DX. Additionally, Standard & Poors raised credit rating of the Greece from selective default. This also supported an upside in the currency. The currency touched an intra-day high of 1.3238 and closed at 1.3229 on Tuesday. Outlook In todays session we expect Euro to appreciate taking cues from positive global market sentiments along with weakness in the DX. Additionally favorable data from the region is also expected to support an upside in the currency. Technical Outlook
Trend Euro/INR Dec12 (NSE/MCX-SX) Up 72.20/71.95 72.65/72.90 valid for December 19, 2012 Support Resistance

Euro (% change)
Last Euro /$ (Spot) Euro / INR (Spot) Euro / INR Dec 12 Futures (NSE) Euro / INR Dec12 Futures (MCX-SX)
1.3229 72.58

as on December 18 2012 Prev. day

0.5 -0.7

WoW
1.7 -2.9

MoM
3.8 -3.3

YoY
1.5 #N/A

72.44 72.5

0.28 0.27

2.62 2.63

2.83 2.82

4.27 4.31

Source: Reuters

Technical Chart Euro

GBP/INR
The Pound appreciated by 0.3 percent yesterday on the back of upbeat global market sentiments coupled with weakness in the DX. However, sharp upside in the currency was capped as a result of unfavorable economic data from the country. The currency touched an intra-day high of 1.6269 and closed at 1.625 on Tuesday. UKs Consumer Price Index (CPI) remained unchanged at 2.7 percent in the month of November. Producer Price Index (PPI) Input also remained unchanged at 0.1 percent in November. Retail Price Index (RPI) grew at slow pace of 3 percent in November as against a rise of 3.2 percent in October. Core CPI was unchanged at 2.6 percent in last month. House Price Index (HPI) also grew at slower pace of 1.5 percent in October from rise of 1.7 percent a month ago. PPI Output declined by 0.2 percent in November with respect to rise of 0.2 percent in October. Outlook In todays session, we expect Pound to appreciate on the back of firm global market sentiments along with weakness in the DX. However, unfavorable economic data from the nation is expected to cap appreciation in the currency. Technical Outlook
Trend GBP/INR Dec 12 (NSE/MCX-SX) Up valid for December 19, 2012 Support 88.80/88.40 Resistance 89.45/89.75

Source: Telequote

GBP (% change)
Last $ / GBP (Spot) GBP / INR (Spot) GBP / INR Dec12 Futures (NSE) GBP / INR Dec 12 Futures (MCX-SX)
1.625

as on December 18, 2012

Prev. day
0.3

WoW
0.8

MoM
2.3

YoY
4.7

89.223 89.1275

0.66 0.23

1.98 1.79

1.83 1.67

9.51 8.59

Source: Reuters

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Currencies Daily Report

Wednesday| December 19, 2012

JPY/INR
JPY (% change) The Japanese Yen depreciated by 0.4 percent yesterday on the back of rise in risk appetite in the global market sentiments which led to decline in demand for the low yielding currency. It touched an intra-day low of 84.27 and closed at 84.20 on Tuesday. Japans Trade Balance was at a deficit of 0.87 trillion Yen in November from previous deficit of 0.62 trillion Yen a month ago. Outlook Technical Chart JPY For the intra-day, we expect to yen to depreciate owing to rise in the risk appetite in the global markets which will reduce the demand for the low yielding currency. Further expectations that the new government might announce stimulus measures also caused depreciation in the currency. Additionally, unfavorable data from the nation is also expected to depreciate the currency. Technical Outlook
Trend JPY/INR Dec 12 (NSE/MCX-SX) Up valid for December 19, 2012 Support 65.30/65.0 Resistance 65.80/66.05
Source: Telequote

as on December 18, 2012 Last Prev day

0.4

WoW
2.0

MoM
3.6

YoY
8.3

JPY / $ (Spot) JPY / INR (Spot) JPY 100 / INR Nov12 Futures (NSE) JPY 100 / INR Nov12 Futures (MCX-SX)

84.2

0.6519 89.13 65.60

-0.05 0.23 -0.11

-0.90 -0.62 -0.61

-3.88 -3.74 -3.75

-3.36 8.59 -3.33

Source: Reuters

Economic Indicators to be released on December 19, 2012

Indicator Trade Balance German Ifo Business Climate Current Account MPC Meeting Minutes CBI Realized Sales Building Permits Housing Starts Crude Oil Inventories Country Japan Euro Euro UK UK US US US Time (IST) 5:20am 2:30pm 2:30pm 3:00pm 4:30pm 7:00pm 7:00pm 9:00pm Actual -0.87T Forecast -0.81T 101.9 5.8B 0-0-9 26 0.87M 0.87M -0.9M Previous -0.62T 101.4 0.8B 0-0-9 33 0.87M 0.89M 0.8M Impact Medium High Medium High Medium High Medium Medium

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