HSL PCG CURRENCY DAILY

19 January, 2017

PRIVATE CLIENT GROUP [PCG]

 VIEW POINT
STRATEGY FOR THE DAY Recovery in Dollar Drags Rupee Lower
The Indian rupee on Wednesday weakened against the US dollar
JPYINR JAN FUT. tracking the losses in the Asian currencies markets.
The local currency closed at 68.08 a dollar, down 0.17% from
BUY ARND 59.75 TGT 59.50 SL 60.10 previous close of 67.96. The rupee opened at 67.94 a dollar and
touched a high and a low of 67.89 and 68.08 respectively.
MAJOR CURRENCY The 10-year bond yield closed at 6.454% compared to Tuesday's
close of 6.422%. Yield on 10-year govt. bond gains to highest in
Prev. more than two weeks as investors growing cautious ahead of
Close Chg. % Chg. budget.
Close
The one month forward USDINR NDF quoted at 68.49 from
USDINR 68.075 67.960 0.115 0.17%
yesterdays 68.32 indicating positive opening of the pair at domestic
DXY INDX 101.250 100.930 0.320 0.32% bourses. However, technically it has been consolidating in broad
EURUSD 1.064 1.063 0.001 0.06% range of 67.70 to 68.39.
GBPUSD 1.228 1.226 0.001 0.11%
USDJPY 114.690 114.650 0.040 0.03% Dollar gains after Yellens comments
DG USDINR 68.236 68.236 0.000 0.00% The dollar gains against its major rivals after the Fed's Beige Book.
Federal Reserve Janet Yellen suggesting U.S interest rates could be
GLOBAL INDICES raised quickly this year. Federal Reserve Chair Janet Yellen said the
U.S. economy is close to the central banks objectives of full
employment and stable prices and shes confident it will continue to
Prev. improve. It is fair to say the economy is near maximum
Close Chg. % Chg.
Close employment and inflation is moving toward our goal, Yellen told.
SGX NIFTY 8435.0 8435.0 0 0.00% US consumer-price index increased 2.1% in December from a year
NIFTY 8417.0 8398.0 19 0.23% earlier, the largest year-over-year rise since June 2014. The Feds
SENSEX 27257.6 27235.7 22 0.08% target is a 2% annual inflation rate, though its preferred gauge is
HANG-SENG 23026.4 23098.3 -72 -0.31% the Commerce Departments personal-consumption expenditures
price index and not the Consumer Price Index. As measured by the
NIKKEI 19064.0 18894.4 170 0.90%
PCE index, U.S. inflation was a modest 1.4% in November. It has
SHANGHAI 3110.6 3113.0 -2 -0.08% undershot the central banks threshold for the past 4 years, but it
S&P INDEX 2271.9 2267.9 4 0.18% too has now firmed, from readings close to zero in 2015.
DOW JONES 19804.7 19826.8 -22 -0.11% The unemployment rate was 4.7% in December, just below the
NASDAQ 5555.7 5538.7 17 0.31% Feds long-run projection of 4.8%.
FTSE The pound, which had jumped 3% on Tuesday to vault above
7247.6 7220.4 27 0.38%
$1.2400 following British Prime Minister Theresa May's Brexit
CAC 4853.4 4859.7 -6 -0.13%
speech, lost more than 1% overnight and last traded at $1.2265
DAX 11599.4 11540.0 59 0.51% after announcement of supreme court to deliver Brexit ruling on 24
January.

PRIVATE CLIENT GROUP [PCG]

 TECHNICAL OUTLOOK

SPOT USDINR DAILY CHART

Technical Observations

USDINR pegged near short term moving average of 20 days indicating consolidation.
Momentum oscillators RSI given negative divergence and cross over suggesting weakness in the pair. However, on hourly chart
the oscillators turn positive suggesting short covering bounce in day trade.
The pair could head lower towards 67.70, the previous bottom, and face resistance at 68.39.
The short term bias turn bearish with downside support at 67.715 and 67.3250 until it surpass 68.3875.

PRIVATE CLIENT GROUP [PCG]

TECHNICAL LEVELS

Contracts Last Pivot S3 S2 S1 R1 R2 R3 View For The Day

USDINR JAN17 68.14 68.09 67.81 67.88 68.01 68.21 68.29 68.42 Short Covering
EURINR JAN17 72.81 72.78 72.43 72.54 72.67 72.91 73.02 73.15 Long Buildup
GBPINR JAN17 83.91 83.91 83.53 83.66 83.78 84.03 84.16 84.28 Short Covering
JPYINR JAN17 60.10 60.09 59.80 59.90 60.00 60.20 60.29 60.39 Long Unwinding

Wkly Wkly 1-Mth. 1-Mth. 52 Wk 52 Wk

Spot 5 DMA 20 DMA 50 DMA 100 DMA 200 DMA
High Low High Low High Low
USDINR 68.39 67.95 68.39 67.33 68.86 66.07 68.07 68.07 67.95 67.37 67.16
EURINR 72.69 71.67 72.81 70.42 77.49 70.42 72.55 71.67 72.09 73.24 74.21
GBPINR 83.69 82.51 85.88 81.78 100.49 80.89 83.09 83.37 84.35 84.56 88.63
JPYINR 59.72 57.93 60.24 57.25 68.11 55.73 59.79 58.58 59.54 62.19 62.91

CURRENCY MOVEMENT
Open Chg. in Chg. in
Currency Open High Low Close Chg. Volume
Interest OI Volume
SPOT USDINR 67.94 68.08 67.89 68.08 0.12 -- -- -- --
USDINR JAN. FUT. 68.02 68.16 67.96 68.14 0.09 1729076 -66929 718815 -446092
SPOT EURINR 72.69 72.76 72.55 72.75 0.03 -- -- -- --
EURINR JAN. FUT. 72.89 72.89 72.65 72.81 0.04 38007 168 29601 -25372
SPOT GBPINR 83.87 83.92 83.65 83.78 1.08 -- -- -- --
GBPINR JAN. FUT. 83.87 84.04 83.79 83.91 1.08 30744 -2969 82471 -23505
SPOT JPYINR 60.12 60.12 59.90 60.03 -0.18 -- -- -- --
JPYINR JAN. FUT. 60.19 60.19 59.99 60.10 -0.14 24208 -4724 26789 -22590

PRIVATE CLIENT GROUP [PCG]

 ECONOMIC EVENTS RELEASED
Date Time Country Event Period Survey Actual Prior

01/18/2017 15:00 UK ILO Unemployment Rate 3Mths Nov 4.80% 4.80% 4.80%
01/18/2017 15:30 EC CPI YoY Dec F 1.10% 1.10% 0.60%
01/18/2017 17:30 US MBA Mortgage Applications 13-Jan -- 0.80% 5.80%
01/18/2017 19:00 US CPI YoY Dec 2.10% 2.10% 1.70%
01/18/2017 19:45 US Industrial Production MoM Dec 0.70% 0.80% -0.70%
01/18/2017 19:45 US Manufacturing (SIC) Production Dec 0.50% 0.20% -0.10%
01/18/2017 20:30 US NAHB Housing Market Index Jan 69 67 70

ECONOMIC EVENTS RELEASED

Date Time Country Event Period Survey Prior

01/19/2017 14:30 EC Current Account NSA Nov -- 32.8b
01/19/2017 18:15 EC ECB Main Refinancing Rate 19-Jan 0.00% 0.00%
01/19/2017 18:15 EC ECB Marginal Lending Facility 19-Jan 0.25% 0.25%
01/19/2017 18:15 EC ECB Deposit Facility Rate 19-Jan -0.40% -0.40%
01/19/2017 18:15 EC ECB Asset Purchase Target Jan EU80b EU80b
01/19/2017 19:00 US Housing Starts Dec 1195k 1090k
01/19/2017 19:00 US Building Permits Dec 1220k 1212k
01/19/2017 19:00 US Initial Jobless Claims 14-Jan -- 247k
01/19/2017 19:00 US Continuing Claims 7-Jan -- 2087k

PRIVATE CLIENT GROUP [PCG]

 Technical Analyst: Vinay Rajani (vinay.rajani@hdfcsec.com)
Currency Analyst: Dilip Parmar(dilip.parmar@hdfcsec.com)

HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042
HDFC securities Limited, 4th Floor, Astral Tower, Above HDFC Bank Ltd, Nr.Mithakhali Six Roads, Navrangpura, Ahmedabad 380009.
Phone: (079)66070168, Website: www.hdfcsec.com Email: pcg.advisory@hdfcsec.com

Disclosure:

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PRIVATE CLIENT GROUP [PCG]