Currencies Daily Report

Thursday| September 20, 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
Thursday| September 20, 2012

Highlights
 US Building Permits declined by 0.80 million in August.  US Housing Starts increased to 0.75M in the last month.  US Existing-Home Sales rose to 4.82 million in the month of August.  BOJ expanded its asset- purchase fund to 55 trillion yen ($695 billion)

Market Highlights (% change)
Last NIFTY SENSEX DJIA S&P FTSE KOSPI BOVESPA NIKKEI Nymex Crude (Oct'12) -$/bbl Comex Gold (Dec’12) - $/oz Comex Silver(Dec’12) $/oz LME Copper (3 month) -$/tonne CRB Index (Industrial) G-Sec -10 yr @7.8% - Yield 5600.1 18496.0 13577.96 1461.1 16100.2 2007.9 61651.8 9232.2 91.73 1768.60 3460.50 8350.00 491.82 99.86 Prev. day -0.2 -0.2 0.1 0.1 0.2 0.1 -0.2 1.2 -3.7 0.0 -0.1 0.6 0.0 0.1

as on September 19, 2012 WoW 3.9 3.6 1.8 1.7 -1.9 3.0 2.9 -0.1 -5.4 2.2 4.1 3.4 3.1 0.1 MoM 3.3 3.4 3.1 3.0 6.2 3.8 3.8 1.1 -5.7 8.0 17.1 9.9 4.1 0.5 YoY 11.3 10.5 19.0 20.2 12.1 9.2 9.4 5.9 5.6 -2.1 -13.7 1.2 -13.7 3.4

Asian markets are trading on a weak note as Chinese manufacturing declined and exports from Japan fell for the third straight consecutive month. US Building Permits declined by 0.80million in August as against a rise of 0.81 million in the last month. The US Housing Starts increased by 0.2M to 0.75M in the month of August as compared to 0.73 M in the month of July. The US Existing-Home Sales rose to 4.82 million in the month of August as against 4.47 million in the month of July. Bank of Japan expanded its asset- purchase fund to 55 trillion yen ($695 billion) from 45 trillion yen and kept its lending facility at 25 trillion yen.

US Dollar Index
US Dollar Index declined 0.2 percent in the yesterday’s session on the back of rise in the risk appetite amongst market participants after Bank of Japan announced stimulus measures to boost the economy. Further favourable data from the US economy lifted up the sentiments. This led to decline in the demand for the low yielding currency that is US Dollar Index (DX). US equities also ended on upbeat note taking cues from positive market sentiments after the Bank of Japan announced its stimulus measures to boost the economy amidst favourable US housing starts and US existing home sales data in the yesterday’s session. The currency touched a low of 79.07 and closed at 79.17 on Wednesday.

Source: Reuters

US Dollar (% change)
Last Dollar Index US $ / INR (Spot) 79.17 54.02 54.04 54.39 Prev. day -0.2 -0.2 0.08 0.73

as on September 19, 2012 WoW -0.7 2.2 -2.58 -1.92 MoM -2.9 2.7 -3.19 -2.56 YoY 2.1 -11.1 14.13 14.87

Dollar/INR
Indian Rupee swung between gains and losses and finally settled on a flat note with marginal depreciation day before yesterday on the back of weak global market sentiments and strength in the DX in the early part of the trade. Further, there were also reports of dollar demand from oil refiners which led to depreciation in the Indian rupee. However, sharp depreciation in the Indian rupee was capped on the back of selling of dollars by the exporters coupled with heavy capital inflows. The currency touched an intra-day low of 54.38 and closed at 53.90 on Tuesday. For the current month FII inflows totalled at Rs. 8056.50 crores till 18 September 2012. While year to date basis, net capital inflows stood at Rs. 71126.10 crores till 18th September 2012.
th

US $ / INR Sep’12 Futures (NSE) US $ / INR Sep’12 Futures (MCX-SX)

Source: Reuters

Technical Chart – USD/INR

Outlook In today’s session, we expect rupee to depreciate due the opposition on FDI in retail business and reforms by the political parties and with Trinmool congress leader Ms. Mamata Banjeerji withdrawing its support from the central government which would cause uncertainty thereby depreciating the rupee.

Source: Telequote

Technical Outlook
US Dollar/INR Sep’12 (NSE/MCX-SX)

valid for September 20, 2012 Trend Sideways Support 53.9/53.7 Resistance 54.3/54.5

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Currencies Daily Report
Thursday| September 20, 2012

Euro/INR
Euro swung between gains and losses and settled on a flat note due to firm global market sentiments after Bank of Japan announced stimulus measures to boost the economy and Spain’s bond yields declined after Prime Minister Mariano Rajoy said that the government is committed to cut the budget deficit. Further weakness in the DX also supported an upside in the currency. The currency touched a high of 1.3085 and closed at 1.3048 on Wednesday. Outlook We, expect Euro to trade sideways on the back of weak global market sentiments along with strength in the DX. However, positive economic data from the region is expected to support for upside in the currency. Technical Outlook
Trend Euro/INR Sep’12 (NSE/MCX-SX) Down 70.4/70.18 70.9/71.2 valid for September 20, 2012 Support Resistance

Euro (% change)
Last Euro /$ (Spot) Euro / INR (Spot) Euro / INR Sep’12 Futures (NSE) Euro / INR Sep’12 Futures (MCX-SX) 1.3048 70.46 70.62 70.7 Prev. day 0.0 -0.2 -0.18 -0.04

as on September 19, 2012 WoW 1.2 1.1 -0.37 -0.18 MoM 4.2 -1.4 2.47 2.63 YoY -4.8 -6.5 8.05 8.20

Source: Reuters

Technical Chart – Euro

GBP/INR
The Pound appreciated 0.1 percent yesterday taking cues from positive global market sentiments along with weakness in the DX. It touched an intra-day high of 1.6183 and closed at 1.6218 on Wednesday. Outlook In the intra-day, we expect Pound to trade on weak note on account of negative global market sentiments along with strength in the US Dollar Index. Additionally, unfavorable data from the economy might also exert downside pressure on the currency. Technical Outlook
Trend GBP/INR Sep ’12 (NSE/MCX-SX) Down valid for September 20, 2012 Support 87.55/87.3 Resistance 88.1/88.4

Source: Telequote

GBP (% change)
Last $ / GBP (Spot) GBP / INR (Spot) GBP / INR Sep’12 Futures (NSE) GBP / INR Sep’12 Futures (MCX-SX) 1.6218 87.62 87.80 Prev. day -0.1 -0.1 0.24

as on September 20, 2012

WoW 0.7 1.5 -1.20

MoM 2.1 0.6 0.33

YoY 3.0 -15.8 17.32

88.15

0.66

-0.80

0.72

17.77

Source: Reuters

Technical Chart – GBP

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Currencies Daily Report
Thursday| September 20, 2012

JPY/INR
The Japanese Yen appreciated by 0.6 percent yesterday on the back of rise in risk aversion amongst market participants after exports from the nation declined indicating that the economy is slowing down. Also, there were reports that the stimulus measures offered by the Bank of Japan on September 19, 2012 might not be enough to revive the economy. The currency touched an intra-day low of 79.21 and closed at 78.35 on Wednesday. Japan trade balance declined 5.8 percent in August to 0.47 trillion as compared to 0.37 trillion in the month of July. Outlook In today’s trade, we expect Yen to appreciate on the back weak global market sentiments along with doubt that whether stimulus measures announced would be enough to revive growth in the major economies. This might increase the demand for the low yielding currency. However, weak trade balance from the nation is expected to cap sharp appreciation in the currency. Technical Outlook
valid for September 20, 2012

JPY (% change)
Last 78.35 0.689 68.71 69.45 Prev day -0.6 -0.7 -0.20 0.94

as on September 19, 2012 WoW 0.7 2.8 -3.28 -2.25 MoM -0.3 2.3 -2.18 -1.10 YoY 2.6 -9.6 11.29 12.49

JPY / $ (Spot) JPY / INR (Spot) JPY 100 / INR Sep’12 Futures (NSE) JPY 100 / INR Sep’12 Futures (MCX-SX)

Source: Reuters

Technical Chart – JPY

Source: Telequote

Economic Indicators to be released on September 20, 2012
Indicator Trade Balance HSBC Flash Manufacturing PMI BOJ Gov Shirakawa Speaks German PPI m/m French Flash Manufacturing PMI French Flash Services PMI German Flash Manufacturing PMI German Flash Services PMI Flash Manufacturing PMI Flash Services PMI Retail Sales m/m Spanish 10-y Bond Auction CBI Industrial Order Expectations Unemployment Claims Flash Manufacturing PMI FOMC Member Lockhart Speaks Philly Fed Manufacturing Index ECB President Draghi Speaks Country Japan China Japan Euro Euro Euro Euro Euro Euro Euro UK Euro UK US US US US Euro Time (IST) 5:20 am 8:00 am Tentative 11:30 am 12:30 pm 12:30 pm 1:00 pm 1:00 pm 1:30 pm 1:30 pm 2:00 pm Tentative 3:30 pm 6:00 pm 6:30 pm 7:00 pm 7:30 pm 9:30 pm -4.1 -7.1 -14 374K 51.6 0.4% 46.5 49.5 45.4 48.5 45.4 47.4 -0.4% 0.0% 46.0 49.2 44.7 48.3 45.1 47.2 0.3% 6.65|2.4 -21 382k 51.5 Medium Medium Medium High Medium Medium Medium High High Medium High Medium Medium High Actual Forecast -0.37T Previous -0.33T 47.6 Impact Medium High

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