Currencies Daily Report

Monday| February 11, 2013

Content
Overview US Dollar Euro GBP JPY Economic Indicators
Overview:

Research Team
Fundamental Team Nalini Rao - Sr. Research Analyst [email protected] (022) 2921 2000 Extn. 6135 Anish Vyas - Research Analyst [email protected] (022) 2921 2000 Extn. 6104

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Currencies Daily Report

Monday| February 11, 2013

Highlights
US Trade Balance was at a deficit of $38.5 billion in December. Chinas CPI grew at slow pace of 2 percent in the last month. Italian Industrial Production increased by 0.4 percent in December. Japans Economy Watchers Sentiment rose to 49.5-mark in January. Major Asian markets are closed in todays trading and Australian shares rose to highest level in nearly three years. Japanese markets closed today on event of National Foundation Day and Chinese markets closed for a week on account of Spring Festival. US Trade Balance was at a deficit of $38.5 billion in December as against a previous deficit of $48.6 billion a month ago. Wholesale Inventories declined by 0.1 percent in December from rise of 0.4 percent in November. Chinas Consumer Price Index (CPI) grew at slow pace of 2 percent in January from rise of 2.5 percent in December. Producer Price Index (PPI) declined by 1.6 percent in January as compared to fall of 1.9 percent a month ago.

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 5903.5 19484.8 13992.97 1517.9 16630.5 1950.9 58497.8 11153.2 95.72 1666.00 3142.50 8276.50 101.98 0.2 Prev. day -0.6 -0.5 0.4 0.6 1.4 1.0 0.2 -1.8 -0.1 -0.3 0.1 0.8

as on February 8, 2013 WoW -1.6 -1.5 -0.1 0.3 -4.0 -0.4 -3.1 -0.1 -2.1 -0.6 -1.6 -0.4 0.4 0.1 MoM -0.8 -0.9 3.7 4.2 -4.8 -2.3 -5.8 5.2 2.3 -0.2 3.5 5.5 YoY 9.1 9.3 8.6 12.5 -0.1 -0.9 -10.7 23.9 -4.1 -4.2 -7.3 -5.3 -1.4

US Dollar Index
US Dollar Index (DX) gained around 1.5 percent in the last week on account of rise in risk aversion in the global market sentiments which led to rise in demand for the low yielding currency. Additionally, statement from European Central Bank President Mario Draghi that strength in the Euro as a currency could harm the economic growth of the region also supported an upside in the DX. However, sharp upside in the currency was capped as a result of favorable economic data from the US. The currency touched a weekly high of 80.35 and closed at 80.32 on Friday.

Source: Reuters

US Dollar (% change)
Last Dollar Index US $ / INR (Spot) US $ / INR Feb13 Futures (NSE) US $ / INR Feb13 Futures (MCX-SX) 80.32 53.58 53.74 53.74 Prev. day 0.1 -0.7 0.62 0.62

as on February 8, 2013 WoW 1.5 -0.8 0.58 0.58 MoM 0.9 2.3 -2.69 -2.69 YoY 2.1 -7.7 8.81 8.81

Dollar/INR
On a weekly basis, Indian Rupee depreciated around 0.8 percent on the back of government lowering the GDP growth forecast for fiscal year 2012-13. Additionally, weak domestic market sentiments coupled with strength in the DX also exerted downside pressure on the currency. However, sharp downside in the currency was cushioned as a result of $2.1 billion share auction in the NTPC Limited. The currency touched a weekly low of 53.67 and closed at 53.58 on Friday. For the month of January 2013, FII inflows totaled at Rs.17,210.80 crores ($3,234.48 million) as on 8th February 2013. Year to date basis, net capital inflows stood at Rs.39,269.80 crores ($7,293.80 million) till 8th February 2013. Outlook From the intra-day perspective, we expect Indian Rupee to depreciate on the back of countrys Trade Balance expected to come on a negative note. However, sharp downside in the currency will be cushioned as a result of weakness in the DX.

Source: Reuters

Technical Chart USD/INR

Source: Telequote

Technical Outlook
Trend US Dollar/INR Feb13 (NSE/MCX-SX) Up

valid for February 11, 2013 Support 53.60/53.45 Resistance 53.90/54.05

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Currencies Daily Report

Monday| February 11, 2013

Euro/INR
The Euro depreciated around 2 percent in the last week on the back of European Central Bank President Mario Draghi statement that strength in the currency will hamper the economic growth in the region. Also, unfavorable economic data like rise in Spanish unemployment change, decline in European retail sales and Italian service PMI along with strength in the DX acted as a negative factor for the currency. However, sharp downside in the currency was cushioned as a result of German Factory Orders and industrial production coming on a favorable note. German Trade Balance was at a surplus of 16.8 billion Euros in December as against a previous surplus of $14.6billion a month ago. French Gov Budget Balance was at a deficit of $87.2 billion in December from earlier deficit of 103.4 billion in November. Italian Industrial Production increased by 0.4 percent in December as compared to decline of 1.1 percent in prior month. The Euro touched a weekly low of 1.3352 and closed at 1.3363 against dollar on Friday. Outlook In todays session, we expect Euro to depreciate on account of French Industrial Production forecasted to come on a negative note along with weak global market sentiments. However, weakness in the DX will restrict sharp fall in the currency. Technical Outlook
Trend Euro/INR Feb13 (NSE/MCX-SX) Sideways 71.85/71.60 72.30/72.50

Euro (% change)
Last Euro /$ (Spot) Euro / INR (Spot) Euro / INR Feb 13 Futures (NSE) Euro / INR Feb13 Futures (MCX-SX) 1.3363 71.60 72.05 72.0 Prev. day -0.2 0.0 -0.58 -0.59

as on February 8, 2013 WoW -2.0 1.4 -1.08 -1.09 MoM 0.1 1.9 -0.49 -0.51 9.95 9.93 YoY 0.6

Source: Reuters

Technical Chart Euro

Source: Telequote

GBP (% change)
valid for February 11, 2013 Support Resistance Last $ / GBP (Spot) GBP / INR (Spot) 1.5796 84.676 84.67 Prev. day 0.52 1.28 0.87

as on February 8, 2013

WoW 0.7 1.46 0.21

MoM -2.1 -4.13 -4.62

YoY -0.1 8.96 8.00

GBP/INR
On a weekly basis, Sterling Pound appreciated around 0.7 percent taking cues from favorable economic data like Services PMI, rise in manufacturing production along with increase in industrial production. However, sharp upside in the currency was restricted as a result of strength in the DX coupled with weak global market sentiments. The Sterling Pound touched a weekly high of 1.5844 and closed at 1.5796 against dollar on Friday. Outlook We expect the Sterling Pound to trade on a negative note in todays trade on the back of weak global market sentiments. However, weakness in the DX will cushion sharp fall in the currency. Technical Outlook
Trend GBP/INR Feb 13 (NSE/MCX-SX) Up valid for February 11, 2013 Support 84.30/83.90 Resistance 84.90/85.15

GBP / INR Feb13 Futures (NSE) GBP / INR Feb 13 Futures (MCX-SX)

84.67

0.86

0.22

-4.62

8.00

Source: Reuters

Technical Chart Sterling Pound

Source: Telequote

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Currencies Daily Report

Monday| February 11, 2013

JPY/INR
JPY (% change) The Japanese Yen appreciated by 0.1 percent in the last week on account of rise in risk aversion in the global market sentiments which led to rise in demand for the low yielding currency. Additionally, rise in core machinery orders and economy watchers sentiments data came on a positive note which also supported an upside in the currency. Japans Economy Watchers Sentiment rose by 3.7 points to 49.5-mark in January as compared to earlier rise of 45.8-level a month ago. The Yen touched a weekly high of 91.96 and closed at 92.66 against dollar on Friday. Outlook For the intra-day, we expect yen to appreciate taking cues from rise in risk aversion in the global market sentiments which will lead to rise in demand for the low yielding currency. Technical Outlook
Trend JPY/INR Feb 13 (NSE/MCX-SX) Up valid for February 11, 2013 Support 57.80/57.40 Resistance 58.50/59.0
Source: Telequote

as on February 8, 2013 Last 92.66 0.578 58.18 58.19 Prev day -1.0 1.69 2.13 2.14 WoW -0.1 0.94 0.19 0.20 MoM 3.9 -8.73 -7.91 -7.91 YoY 19.3 -5.82 -9.29 -9.28

JPY / $ (Spot) JPY / INR (Spot) JPY 100 / INR Feb13 Futures (NSE) JPY 100 / INR Feb13 Futures (MCX-SX)

Source: Reuters

Technical Chart JPY

Economic Indicators to be released on February 11, 2013

Indicator Bank Holiday Bank Holiday French Industrial Production m/m Eurogroup Meetings FOMC Member Yellen Speaks Country Japan China Euro Euro US Time (IST) All Day All Day 1:15pm All Day 11:30pm Actual Forecast -0.3% Previous 0.5% Impact Medium High Medium

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