Currencies Daily Report

Tuesday| January 15, 2013

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

Tuesday| January 15, 2013

Highlights
Italian Industrial Production declined to 1 percent in November. Industrial Production of the Euro region fell 0.3 percent in November WPI of India declined to 7.18 percent in November. Asian markets are trading on a positive note taking cues from firmness in the Japanese stocks as dollar drop after US Treasury Secretary Timothy F. Geithner raised concerns that if the debt ceiling is not raised that might impact the growth of the economy. However a cautious approach might be adopted during the day as the worries of debt ceiling might dampen sentiments.

Market Highlights (% change)

Last NIFTY SENSEX DJIA S&P FTSE KOSPI BOVESPA NIKKEI Nymex Crude (Jan13) - $/bbl Comex Gold (Jan13) - $/oz Comex Silver(Jan13) $/oz LME Copper (3 month) -$/tonne CRB Index (Industrial) G-Sec -10 yr @7.8% Yield 102.27 0.4 6024.1 19906.4 13507.32 1464.15 17391.2 2007.0 62080.8
10801.6

as on January 14, 2013 Prev. day 1.2 1.2 0.1 -0.19 6.5 0.5 10.3
1.4

WoW 0.6 1.1 0.9 0.58 2.9 -0.2 0.2

-0.1

MoM 5.2 5.6 2.0 3.39 10.3 1.6 4.4

13.4

YoY 24.7 24.1 8.3 13.57 14.5 7.6 3.6

27.9

US Dollar Index
US Dollar Index (DX) declined 0.1 percent due to rise in risk appetite in the global markets owing to positive sentiments created European Central Bank President Mario Draghi said that the economy is expected to recover in 2013 and kept the interest rate of the region steady its policy meeting held on January, 10 2013. However, towards the end of the session rise in the risk aversion was witnessed amongst the market participants as worries over the US debt ceiling emerged again. US Treasury Secretary Timothy F. Geithner said that failure to raise the debt ceiling of the nation might impact the health of the economy. US equities continued to trade in the green tracking positive global market sentiments resulting from the optimism that the economies are on the path of recovery. European Central Bank President comment that growth in the region might be witnessed in 2013 has raised hopes that debt crisis of the region might be stemmed. However, towards the end of the session some gains were erased as the US debt ceiling issues reemerged raising worries that if the debt ceiling is not raised might restrict growth of the nation. The index touched a low of 79.41 and closed at 79.53 on Monday.

85.93 1668.90 3108.00 8007.50

0.8 0.5 2.3 -1.0

-5.6 1.4 3.5 -1.0

1.3 -2.8 -7.8 -1.8

-11.3 1.3 3.3 5.1

0.6

2.5

-1.2

Source: Reuters

US Dollar (% change)
Last Dollar Index US $ / INR (Spot) US $ / INR Jan13 Futures (NSE) US $ / INR Jan13 Futures (MCX-SX) 79.53 54.51 54.6075 54.605 Prev. day -0.1 0.6 -0.61 -0.61

as on January 14, 2013 WoW -1.0 1.3 -1.56 -1.56 MoM -0.4 -0.7 0.00 -0.01 YoY -1.9 -5.5 5.58 5.58

Dollar/INR
The Indian Rupee appreciated taking cues from firm global market sentiments and weakness in the DX. Additionally, more than expected decline in the Wholesale Price Index (WPI) of the nation also added to the appreciation in the currency. The inflation for the month of December eased to a three year low at 7.18 percent from 7.24 percent in November. Lower inflation raised hopes amongst investors that the RBI in its policy meeting might cut the interest rates. Sustained capital inflows from the foreign institutional investors also supported appreciation in the currency. Further, government decision to delay the GAAR till April 16, 2016 also supported positive sentiments in the markets. The rupee closed at 54.51 after touching an intra-day high of 54.405 on Friday. For the current month 2013 FII inflows totaled at Rs 9588.90 crores till th 14 January 2013. While year to date basis, net capital inflows for the year 2013 stood at Rs. 9,588.90 crores. Outlook From the intra-day perspective, we expect Indian Rupee to appreciate due to firmness in the Asian markets and continued inflows from the foreign institutional investors. Weakness in the DX is also expected to support appreciation in the currency.

Source: Reuters

Technical Chart USD/INR

Source: Telequote

Technical Outlook
Trend US Dollar/INR Jan13 (NSE/MCX-SX) Down

valid for January 15, 2013 Support 54.45/54.30 Resistance 54.85/55.10

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Currencies Daily Report

Tuesday| January 15, 2013

Euro/INR
Euro extended gains of the previous day and ended 0.3 percent higher due to optimism that the Euro region is on the path of recovery after European Central Bank President said that the region is likely to witness growth in the later part of the 2013. This created positive market sentiments and supported an upside in the currency. Weakness in the DX also added to the gains in currency. The currency touched an intraday high of 1.3403 and closed at 1.3382 on Monday. Industrial Production of the Euro region fell 0.3 percent in November as compared to -1 percent in the month of October. Italian Industrial Production declined more than expected to -1 percent in the month of November as compared to -1.1 percent in October. Outlook In todays session we expect Euro to appreciate due to mixed global market sentiments along with weakness in the DX. Technical Outlook
Trend Euro/INR Jan13 (NSE/MCX-SX) Sideways 72.70/72.45 73.35/73.80 valid for January 14, 2013 Support Resistance

Euro (% change)
Last Euro /$ (Spot) Euro / INR (Spot) Euro / INR Jan 13 Futures (NSE) Euro / INR Jan13 Futures (MCX-SX) 1.3382 72.84 72.94 72.93 Prev. day 0.3 0.2 0.17 0.16

as on January 14, 2013 WoW 2.0 -0.9 0.84 0.82 MoM 2.4 -3.1 2.06 2.05 YoY 4.3 #N/A 10.23 10.22

Source: Reuters

Technical Chart Euro

Source: Telequote

GBP/INR
The Pound continued to trade in the red and settled 0.3 percent lower in yesterdays session due to worries of economic growth of the nation. Weakness in the DX along with positive global market sentiments cushioned sharp fall in the currency. The currency touched an intra-day low of 1.603 and closed at 1.6076 on Monday. UK RICS House Price Balance remained steady in December as compared to a decline in month of November. Outlook In todays session, we expect Pound to trade with positive bias on the back of firm mixed market sentiments along with weakness in the DX. Additionally, favorable data from the nation is expected to add to the gains in the currency. Technical Outlook
Trend GBP/INR Jan 13 (NSE/MCX-SX) Down valid for January 15, 2013 Support 87.55/87.25 Resistance 88.10/88.45

GBP (% change)
Last $ / GBP (Spot) GBP / INR (Spot) GBP / INR Jan13 Futures (NSE) GBP / INR Jan 13 Futures (MCX-SX) 1.6076 87.619 87.895 Prev. day -0.3 -0.93 -0.66

as on January 14, 2013

WoW -0.2 -1.50 -1.27

MoM -0.4 -0.39 -0.12

YoY 4.8 11.18 10.77

87.895

-0.66

-1.27

-0.12

10.77

Source: Reuters

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Currencies Daily Report

Tuesday| January 15, 2013

JPY/INR
JPY (% change) The Japanese Yen depreciated and ended 0.3 percent lower as Japanese Prime Minister Shinzo Abe is seeking to select new central bank chief who will expand the monetary easing program to revive the economy. Rise in the risk appetite in the global markets in most part of the session also kept the currency depreciated. The currency closed at 89.46 after touching an intra-day low of 89.67 on Monday. Outlook For the intra-day, we expect to yen to appreciate due to mixed global market sentiments. Additionally, worries over the US debt ceiling are expected to create risk aversion which might increase the demand for the low yielding currency.
Last 89.46 0.6095 61.195 61.193 Prev day 0.3 -0.88 -1.09 -1.10 as on January 14, 2013 WoW 1.9 -3.02 -3.10 -3.12 MoM 7.5 -6.50 -6.12 -6.15 YoY 16.5 -8.83 -9.23 -9.22

JPY / $ (Spot) JPY / INR (Spot) JPY 100 / INR Jan13 Futures (NSE) JPY 100 / INR Jan13 Futures (MCX-SX)

Source: Reuters

Technical Chart JPY

Technical Outlook
Trend JPY/INR Jan 13 (NSE/MCX-SX) Down

valid for January 15, 2013 Support 61.0/60.80 Resistance 61.45/61.70

Source: Telequote

Economic Indicators to be released on January 15, 2013

Indicator Fed Chairman Bernanke Speaks RICS House Price Balance Prelim Machine Tool Orders y/y German Final CPI m/m CPI y/y PPI Input m/m RPI y/y Core CPI y/y BOE Gov King Speaks BOE Inflation Letter FOMC Member Rosengren Speaks Core Retail Sales m/m PPI m/m Retail Sales m/m Core PPI m/m Empire State Manufacturing Index Business Inventories m/m Country US UK JPY EU UK UK UK UK UK UK US US US US US US US Time (IST) 2:30 am 5:31 am 11:30 am 12:30 pm 3:00 pm 3:00 pm 3:00 pm 3:00 pm 3:30 pm Tentative 6:30pm 7:00pm 7:00 pm 7:00 pm 7:00 pm 7:00 pm 8:30pm Actual 0% Forecast -8% 0.9% 2.7% 0.0% 3.0% 2.6% 0.2% -0.1% 0.2% 0.2% 1.9 0.3% Previous -9% -21.3% 0.9% 2.7% 0.1% 3.0% 2.6% 0.0% -0.8% 0.3% 0.1% -8.1 0.4% Impact High Medium Low Low High Medium Medium Low High High Medium High High High Medium Medium Medium

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