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Currencies Daily Report

Wednesday| October 31, 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
Wednesday| October 31, 2012

Highlights
• • • • • RBI cuts CRR by 25 basis points to 4.25 percent. Spanish Flash GDP declined by 0.3 percent Q3 of 2012. German Unemployment Change rose to 20,000 in September. UK’s CBI Realized Sales increased to 30-mark in October. Japan’s Overnight Call Rate unchanged at 0.10 percent in October.

Market Highlights (% change)
Last NIFTY SENSEX DJIA S&P FTSE KOSPI
5597.9 18430.9 13107.21 1411.9 15521.8 1899.6

as on October 30, 2012 Prev. day
-1.2 -1.1 0.0 -0.1 1.1 0.4

WoW
-1.6 -1.5 0.0 -0.1 -0.4 -1.4

MoM
-1.8 -1.8 -2.8 -2.0 0.2 -4.8

YoY
5.1 4.1 9.6 9.9 -3.1 -0.5

Asian markets are trading on a positive note on the back of better corporate earnings and favorable industrial output in the South Korea along with rise in the home prices in the U.S. US Standard & Poor's (S&P) / Case-Shiller (CS) Composite-20 House Price Index (HPI) increased by 2 percent in August as against a rise of 1.2 percent a month ago. India’s Reserve Bank of India (RBI) kept the repo rates and reserve repo rates unchanged at 8 percent and 7 percent respectively. However, the central bank has cut the Cash Reserve Ratio (CRR) by 25 basis points to 4.25 percent. Additionally, RBI has reduced the Gross Domestic Product (GDP) forecast for India to 5.8 percent from previous estimate of 6.5 percent respectively. While on the other hand, projection for inflation in March was revised to 7.5 percent from earlier 7 percent.

BOVESPA NIKKEI Nymex Crude (Nov’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

57683.8 8842.0 85.68 1710.50

0.9 -1.0 0.2 0.2

0.0 -0.1 -1.1 0.1

-2.6 0.6 -6.8 -3.5

-1.1 -1.6 -8.1 -0.8

3178.80

0.2

0.1

-8.1

-7.4

7735.00

0.1

-1.5

-7.0

-3.4

US Dollar Index
US dollar Index (DX) declined 0.4 percent due to rise in the risk appetite amongst market participants and thereby increase in the demand for the low yielding currency that is DX. Trading activity remained subdued and the US markets prepare to reopen today after the powerful Hurricane hit the U.S. east coast. US equities remained shut as Hurricane Sandy hits the east coast of US. The currency touched a low of 79.90 and closed at 80.02 on Tuesday.

464.38

-0.1

-1.2

-3.1

-16.4

99.78

-0.3

-0.3

-0.2

7.1

Source: Reuters

US Dollar (% change)
Last Dollar Index US $ / INR (Spot) US $ / INR Nov’12 Futures (NSE) US $ / INR Nov’12 Futures (MCX-SX)
80.02 53.96 54.27 54.27

as on October 30, 2012 Prev. day
-0.4 0.2 0.84 0.85

WoW
-0.1 -0.4 0.83 0.85

MoM
0.2 -2.9 2.26 2.28

YoY
4.9 -9.8 10.74 10.75

Dollar/INR
The Indian Rupee swung between gains and losses and finally appreciated by 0.2 percent in the yesterday’s trading session. The currency appreciated in the later part of the trade on the back of rise in risk appetite in the global market sentiments along with weakness in the DX. However, in the early part of the trade currency had depreciated as the central bank had kept key rates unchanged and cutting the forecast of GDP for the current fiscal year. The currency touched an intra-day high of 53.80 and closed at 53.96 on Tuesday. For the current month FII inflows totaled at Rs. 11,521.50 crores till 30th October 2012. While year to date basis, net capital inflows stood at Rs. 93,852.30 crores till 30th October 2012. Outlook In the intraday we expect, rupee to appreciate on the back of firmness in the Asian markets along with weakness in the DX. However, month end dollar demand may cushion sharp appreciation in the currency. It can even depreciate in the later part of the day.

Source: Reuters

Technical Chart – USD/INR

Source: Telequote

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

valid for October 31, 2012 Trend Up Support 54/53.85 Resistance 54.5/54.75

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Currencies Daily Report
Wednesday| October 31, 2012

Euro/INR
Euro gained 0.4 percent taking cues from better corporate earnings. Additionally, weakness in the DX also supported an upside movement in the currency. However, unfavorable data from the region capped sharp gains in the currency in yesterday’s session. The currency touched a low of 1.2983 and closed at 1.2956 on Tuesday. Spanish Flash Gross Domestic Product (GDP) declined by 0.3 percent in Q3 of 2012 from previous fall of 0.4 percent in Q2 of 2012. German Unemployment Change was at 20,000 in September as against a rise of 12,000 in August. European Retail Raw Materials Price Index (RMPI) declined by 1.8 points to 45.3-mark in October with respect to previous rise of 47.1-level in September. Outlook In today’s session we expect Euro to appreciate on the back of firm global market sentiments. Further, the currency might take cues from the Euro area finance chief meeting which plans to push Greece bailout plan back on the track today as officials spilt on whether the country needs another bailout out. Additionally, weakness in the DX is also expected to support an upside in the currency. Technical Outlook
Trend Euro/INR Nov’12 (NSE/MCX-SX) Up 69.9/69.65 70.5/70.8 valid for October 31, 2012 Support Resistance

Euro (% change)
Last Euro /$ (Spot) Euro / INR (Spot) Euro / INR Nov’12 Futures (NSE) Euro / INR Nov’12 Futures (MCX-SX)
1.2956 69.93 70.21

as on October 30, 2012 Prev. day
0.4 -0.2 0.99

WoW
-0.2 -0.3 0.31

MoM
0.3 -3.3 2.35

YoY
-6.5 -3.5 1.24

70.2

1.02

0.34

2.35

1.29

Source: Reuters

Technical Chart – Euro

Source: Telequote

GBP (% change)
Last Prev. day
0.3 0.0 0.79

as on October 30, 2012

WoW
0.8 -1.2 1.36

MoM
-0.4 -2.5 1.54

YoY
-0.1 -10.7 10.59

GBP/INR
The Pound appreciated by 0.3 percent yesterday taking cues from favorable economic data from the country. Additionally, upbeat global market sentiments along with weakness in the DX also supported an upside in the currency. It touched an intra-day high of and closed at 1.6072 on Tuesday. UK’s Confederation of British Industry (CBI) Realized Sales increased to 30-mark in October from previous rise of 6-level in September. UK’s GfK Consumer Confidence was at -30-level in October as compared to previous mark of -28 in September. Outlook From the intra-day perspective, we expect Pound to appreciate on the back of upbeat global market sentiments along with weakness in the DX. However, unfavorable economic data from the country will cap sharp upside in the currency. Technical Outlook
Trend GBP/INR Nov ’12 (NSE/MCX-SX) Up valid for October 31, 2012 Support 86.75/86.4 Resistance 87.5/87.75

$ / GBP (Spot) GBP / INR (Spot) GBP / INR Nov’12 Futures (NSE) GBP / INR Nov’12 Futures (MCX-SX)

1.6072 86.72 87.22

87.20

0.76

1.35

1.47

10.55

Source: Reuters

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Currencies Daily Report
Wednesday| October 31, 2012

JPY/INR
JPY (% change) The Japanese Yen appreciated by 0.2 percent yesterday on the back of rise in risk aversion in the global market sentiments in the early part of the trade which led to increase in demand for the low yielding currency. However, sharp upside in the currency was capped as Bank of Japan announced further stimulus measures of 11 trillion yen ($138 billion) of asset purchase program. The currency touched an intra-day high of 79.25 and closed at 79.62 on Tuesday. Japan’s Overnight Call Rate remained unchanged at 0.10 percent in the month of October. Japan’s Manufacturing Purchasing Managers' Index (PMI) declined by 1.1 points to 46.9-mark in October from previous 48level in September. Outlook In today’s session, we expect to yen to depreciate on the back of rise in risk appetite amongst market participants. Additionally, stimulus measures announced may also depreciate the currency. However, unfavorable data from the nation may cap sharp depreciation in the currency. Technical Outlook
Trend JPY/INR Nov ’12 (NSE/MCX-SX) Sideways valid for October 31, 2012 Support 67.7/67.25 Resistance 68.65/69.05
Source: Telequote

as on October 30, 2012 Last Prev day
-0.2 0.0 1.17

WoW
-0.3 -0.7 1.40

MoM
1.9 -1.0 0.01

YoY
1.8 -8.8 5.69

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

79.62 0.6773 68.31

68.33

1.20

1.44

0.01

5.67

Source: Reuters

Technical Chart – JPY

Economic Indicators to be released on October 31, 2012
Indicator Average Cash Earnings y/y German Retail Sales m/m French Consumer Spending m/m Eurogroup Meetings CPI Flash Estimate y/y French 10-y Bond Auction Unemployment Rate Employment Cost Index q/q Chicago PMI Crude Oil Inventories MPC Member Bean Speaks Country Japan Euro Euro Euro Euro Euro Euro US US US UK Time (IST) 7:00am 12:30pm 1:15pm All Day 3:30pm Tentative 3:30pm 6:00pm 7:15pm 8:00pm 11:30pm Actual 0.0% Forecast -0.3% 0.6% 0.2% 2.5% 11.4% 0.5% 51.0 1.6M Previous 0.2% 0.3% 0.4% 2.6% 2.28/2.2 11.4% 0.5% 49.7 5.9M Impact Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium

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