July 27, 2015

Indian Currency Market A Weekly Perspective

RETAIL RESEARCH

USD/INR

ST Trend of US$

64.068

Up

Target

Reversal

Prev. Close

Supports

Resistances

64.32

63.24

63.46

63.82-63.75

64.17-64.32

17/07

24/07

% chg

63.460
68.759
99.009
1.952
1.083
124.050

64.068
70.352
99.337
1.929
1.098
123.790

0.96
2.32
0.33
-1.18
1.39
-0.21

28463.31 28112.31
8609.85
8521.55

-1.23
-1.03

Currencies
Dollar (USD-INR)
Euro (EUR-INR)
Pound (GBP-INR)
Yen (INR JPY)
EUR-USD
USD JPY

Equities
Sensex
Nifty

Debt
3 mth T - Bill (%)
GS 8.4 2024

7.52
7.83

7.48
7.83

-0.53
0.00

Source: Bloomberg & SEBI

The week gone by

The Indian Rupee lost last week. W-o-W, the USDINR gained 0.96%.

Foreign Markets
The U.S. dollar rose against most other major currencies on Friday on data pointing to sluggish overseas economic
growth, while the Australian dollar sagged to a six-year low after a Chinese manufacturing gauge fell to its weakest
level in 15 months.
Recent U.S. figures have supported the notion that the Federal Reserve sees the economy as strong enough for it to
end its near zero interest rate policy as early as September, an action that dollar bulls have been betting on since
last year. Worries about global growth have been rekindled. That has sparked a play into the dollar.
The flash Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) dropped to 48.2, the lowest since
April last year, while Markit's PMI gauge on the euro zone fell from a four-year high to 53.7 in early July.
W-o-W however, the US Dollar was down nearly 0.21 percent against yen and 1.39 percent versus the euro.

RETAIL RESEARCH

China's closely controlled currency fell after Beijing said it would relax its trading bands against the dollar, but was
up slightly in later trading. Other currencies linked to global commodities prices also were under pressure because of
the weak Chinese PMI data. The New Zealand dollar was down 0.5 percent at $0.6572.
Worries about Chinese demand sent Brent crude prices in London to near a four-month low at $54.50 a barrel and
copper prices to six-year low of $5,191.50 a tonne.

Outlook
Fed policymakers may provide clues on a rate "lift-off" in a statement after they meet this week. Some analysts said
there are adequate risks to cause the Fed to refrain from raising rates this year, including turmoil in the Chinese
stock market, and a renewed drop in oil and other commodity prices. Friday's news of a surprise 6.8 percent drop in
new-home sales in June was a reminder that the U.S. economy, while faring better than most others, is far from
robust.
Coming to the Indian Rupee, foreign flows will remain a key factor in the near-term for markets. Technically, the
USDINR pair remains in uptrend and could target the 64.32 levels in the coming week.

Upcoming Major Macro Events

Date

Country

Event

Bloomberg
Estimate

29-July-2015

USA

FOMC Meeting Announcement

30-July-2015

USA

30-July-2015
31-July-2015

Previous Level

Jobless Claims

272k

255k

USA

Real GDP - Q/Q change

2.9%

-0.2%

India

IIP Core (YoY Chg)

4.4%

Top Traded USDINR Currency Options for the previous trading session (24-07-2015)
Option

No of Contracts traded

USDINR Call 64.0 Strike Price

1,99,787

USDINR Put 63.5 Strike Price

1,51,576

RBI Reference Rate:

Lst Close (24-07)

Daily % Chg
Weekly % Chg
Monthly % Chg

RETAIL RESEARCH

USD/INR

GBP/INR

EUR/INR

Yen/INR

63.892

99.102

70.121

51.560

0.28

-0.47

0.71

0.37

0.63

-0.33

1.41

0.70

0.36

-1.39

-1.67

0.35

The EUR/INR pair (Daily chart) Technical View

The week gone by saw the EURINR pair recovering from a low of 68.7 after sliding lower in the previous week.
Technical indicators are now giving positive signals as the pair trades above the 13-day SMA. Momentum readings
too are rising and are not yet overbought.
Further upsides for the EURINR pair are likely once the immediate resistances of 70.5 are taken out. The current
downtrend would reverse if the pair manages to move above the previous swing highs of 71.08.

Analyst: Subash Gangadharan (subash.gangadharan@hdfcsec.com)

HDFC securities Limited, I Think Techno Campus, Building B, Alpha, Office Floor 8, Near Kanjurmarg Station, Opposite Crompton
Greaves, Kanjurmarg (East), Mumbai 400042, Fax: (022) 30753435
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information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be relied upon as such. We
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This report has been prepared by the Retail Research team of HDFC Securities Ltd. The views, opinions, estimates, ratings, target price, entry prices and/or
other parameters mentioned in this document may or may not match or may be contrary with those of the other Research teams (Institutional, PCG) of HDFC
Securities Ltd.

RETAIL RESEARCH