Currency Daily Report Thursday, August 25, 2016

Transcription

1 Urjit pat CONTENTS Currency Daily Report Market Overview Daily Analysis with fundamental and technical outlook US Dollar Indian Rupee Euro Sterling Pound Japanese Yen Important events for the day to depreciate on DX strength Euro to trade lower as markets play safe prior to economic data releases Cable to trade lower on weak job report Yen to appreciate on DX strength For further assistance please refer to the full report

2 MARKET HIGHLIGHTS (% change) INDICES LAST CHANGE WOW MOM NIFTY SENSEX DJIA S&P FTSE KOSPI BOVESPA NIKKEI COMMODITIY HIGHLIGHTS (% change) INDICES LAST CHANGE WOW MOM NYMEX CRUDE - $/BBL COMEX GOLD - $/OZ COMEX SILVER - $/OZ LME COPPER (3M) -$/TONNE CURRENCY HIGHLIGHTS (% change) CURRENCY LAST CHANGE WOW MOM DX USD EURUSD GBPUSD USDJPY Technical Chart USD Daily = (GMT) Cndl, =, , , , , , , (-0.03%) /USD 68.1 Jun 16 July 2016 August MARKET OVERVIEW Asian markets are trading mostly negative as markets remain cautious as the annual conference in Jackson Hole, Wyoming will start today. Moreover, the speech by US Fed Chair Janet Yellen on Friday will keep markets in jitters as they expect more clarity about interest rates timing. US DOLLAR INDEX (USD) After remaining pressurized for the past 2-3 days, the American currency finally surged by 0.3 percent in yesterday s trading session. Reason for the same could be attributed to the investors focus on the Jackson Hole meeting which is scheduled to start today. Officials of other central banks and other senior financial officials will indulge into discussion about the world economy. Moreover, the markets will be looking for hints from Federal Reserve chair Janet Yellen regarding the Fed s monetary plans, particularly the timing of a rate hike. FOMC members are expected to express their views in the days leading to the crucial meeting. All the above factors acted as a positive factor for the currency as demand got a boost. The American currency made an intraday high of and closed at on Wednesday. INDIAN RUPEE (USD) The Indian rupee traded on a flat note yesterday as markets play safe prior to the annual conference in Jackson Hole, Wyoming that will start today. Moreover, month end dollar demand from importers and banks further kept the Indian Rupee pressurized. Sensex and Nifty traded in green as positive trading in the Asian market equities governed the trend of the Indian markets and its currency. For the month of August 2016, FII inflows in equities totaled at Rs crores ($ million) as on 22 nd August, Year to date basis, net capital outflows stood at Rs crores ($ million) as on 22 nd August, The Indian currency made an intraday high of and closed at on Wednesday. Rupee is likely to trade sideways as markets play safe prior to the annual conference meeting in Jackson Hole, Wyoming which will start today. This has kept the Asian markets including India pressurized. USD Aug 16 (NSE/MSE) Sideways

3 EURO (EURUSD) Euro currency traded lower by 0.4 percent yesterday owing to mixed release of economic data sets from the zone that kept the shared currency a bit sideways. Moreover, growth in manufacturing sector of Germany and France came on a flat note whereas the service sector gave a breather. Manufacturing Markets now play safe prior to the Jackson Hole meeting that is scheduled to be held this Thursday. The French, Italian and German leaders will discuss the debt issues which have engulfed the entire zone. Each nation is worried they could soon be forced out of power, amid growing pressure on the European Union which major concerns over migration and the economy. Technical Chart EUR Daily EUR= (GMT) Cndl, EUR=, , , , , , , N/A June 2016 July 2016 August Euro currency made an intraday low of and closed at on Wednesday. Euro is expected to trade lower as markets remain cautious ahead of the important economic data release from the nation along with the Jackson Hole meeting that will keep the shared currency a bit pressurized. German ZEW Economic Sentiment declined to 0.5 in July 16 from previous months ZEW Economic Sentiment surged to 4.6 percent from previous months Final CPI for the month of July 16 remained unchanged at 0.2 percent EUR Aug 16 (NSE/MSE) Sideways STERLING POUND (GBPUSD) After remaining pressurized for past few days, the sterling pound rose by 0.30 percent yesterday. Reason for this surge could be attributed to the robust release of retail sales data from the nation and US Dollar weakness. Warmer weather and a weaker pound helped boost retail sales in July 16. According to credit ratings agency Moody s, Britain s economy will slow down but should not go anywhere close to a recession as growth in the rest of the world is also stabilizing. All the above factors have boosted the demand for the Sterling pound which made an intraday high of and closed at on Wednesday. Sterling Pound is expected to trade lower as recent strength in the Sterling pound will prompt the traders to book profits. Moreover, strength in the American currency will further add to the pressure. GBP Aug 16 (NSE/MSE) Sideways Technical Chart GBP/ Daily GBP=R Cndl, GBP=R, , , , , , , (-0.04%) Inflation rate surged by 0.6 percent in July 16 from previous months 0.5 percent. Retail Sales for the month of July 16 surged to 1.4 percent from previous months -0.9 percent (GMT) Jun 16 July 2016 August Public Sector Net Borrowing declined to -1.5B in July 16 from 7.5B in June 16. Average Earnings Index surged by 2.4 percent in July 16 from previous months 2.3 percent. Unemployment Rate remained unchanged at 4.9 percent in July

4 JAPANESE YEN (JPY/USD) Japanese Yen depreciated by 0.20 percent yesterday as markets remain quiet ahead of the Jackson Hole conference today. Moreover, weak release of GDP and inflation data from the nation further added to the woes. Tokyo Core CPI for the July reading stands at -0.3 percent which means that the nation is still struck by deflation and it is clear that the government s Abenomics economic plan and BoJ easing has not worked for the economy. Japan s economic growth plunged for the quarter ending Jun 16 on weak exports and capital expenditure, putting even more pressure on PM Shinzo Abe to come up with policies that produce more sustainable growth. Japanese Yen likely to trade slightly positive as investors flock towards safe-haven assets so as to play safe prior to the Jackson Hole meeting. Technical Chart JPY/ Daily JPY=R Currency Daily Report (GMT) Cndl, JPY=R, , , , , , , (+0.05%) 20 June 2016 July 2016 August Prelim GDP declined to 0.0 percent for quarter ending June 16 from previous months 0.5 percent. Japan s current account jumped to JPY 1.65 trillion, up from JPY 1.45 trillion a month earlier JPY Jun 16 (NSE/MSE) Sideways Economic indicators to be released on 25-Aug-16 Indicator Country Time (IST) Actual Forecast Previous Impact German Ifo Business Climate Euro 1:30pm High Core Durable Goods Orders m/m US 6:00pm - 0.4% -0.4% High Unemployment Claims US 6:00pm - 265K 262K High Durable Goods Orders m/m US 6:00pm - 3.4% -3.9% Medium Jackson Hole Symposium All All day Medium

5 Research Team Heena Imtiaz Naik Research Associate Currency (022) Extn :6104 Prathamesh Mallya Sr. Research Analyst Non-agro Commodity & Currency (022) Extn :6134 Harsh Rawat Technical Analyst Currency (022) Kaynat Chainwala Research Analyst (022) Extn :6136 Thank You Angel Broking Ltd. Registered Office: G-1, Ackruti Trade Centre, Rd. No. 7, MIDC, Andheri (E), Mumbai Corporate Office: 6th Floor, Ackruti Star, MIDC, Andheri (E), Mumbai Tel: (022) Currency: INE / MCX Currency SEBI Regn No: INE / Member ID: Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from Angel Broking Ltd. Your feedback is appreciated on currencies@angelbroking.com