April 13, 2009 USD/INR

Transcription

1 April 13, 2009 USD/INR The Indian Rupee had further strengthened against USD during the week ended on 9 th of April by gaining as much as 0.65% or Rs.0.33 from previous week s closing to settle at After a firm opening at 49.87, it depreciated to levels as USD witnessed increased buying at lower levels by corporate. However an unprecedented rally in equity markets had helped INR to regains the lost ground through the week. The bench mark sensitive index had climbed up by 4.3% during last week to close at 10,803. While international rating agencies lowered the growth projections for India, the planning commission had projected that Indian GDP would rise by 7.4% in in response to the recent measures taken by the government to revive the economic activity. Apart from these factors, weak dollar against major currencies like EURO, GBP also helped INR to trade firm during the week. India s foreign exchange reserves also increased by $2.84 billion to $ during week ended 3rd April as inflows from FIIs increased thanks to strength in equity markets. On the data front, India s industrial output declined by 1.2% in March against the previous decline of 0.5% in February while inflation for the week ended March 28 th stood at 0.26% against the previous week level of 0.31%. Moreover domestic car sales increased during the month of March although truck and bus sales recorded a decline. The prices ended the week on negative note after breaching crucial support at levels. It fell to levels after breaching this support and ended below 10-EMA at Next support is at then levels. Resistance is at 50.2 then levels. The prices are moving in downwards trend channel and crucial support is at 49 levels for the week. Momentum indicator is treading at 0.56 levels. Prices are trading below 10-week EMA and expected to extend correction to next support levels at levels if market sustain below levels. For the week ahead, the prices may trade in the range of with lower bias.

2 EUR/USD Spot euro declined by 2.20% to $ last week as rally in equity markets and optimism that worst of the financial crisis in the U.S. is over. The dollar moved higher as trade balance narrowed down significantly while Wells Fargo & Co. s profit beat estimates. U.S equity indices rallied and speculation grew that European Central Bank will cut its benchmark interest rate to below 1% to spur growth. Further on, lower than estimated jobless numbers from U.S and bets that investors are shifting funds to U.S. securities supported the rally in dollar against the euro. During the week, the Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, gained 1.9 percent this week to , the most since the five days through Nov. 21. Week ahead, euro-zone industrial activity and CPI figures will be important to watch for. Lot of important data releases on manufacturing and housing front from U.S are also due to be released. We expect euro to trade sideways to lower this week. Euro fell sharply erasing previous week s gains after it failed to breach the trend line resistance at 1.36 levels. It breached major support at and made low of , but able to close above this support level. The next support is at then Likewise resistance is at then The trend is looking weak, since prices are trading below 50-week EMA. At the same time, prices are taking strong support at 10-week EMA and it can limit major decline in prices. For the week ahead, prices may recover initially and likely to test resistance level at levels.

3 GBP/USD British pound depreciated by 1.11% after trading in the range of $ $ concern losses at banks will swell eroded demand for higher-yielding assets, sending stocks lower. The currency shed earlier gains as Royal Bank of Scotland Group Plc said it plans to cut 9,000 jobs and manufacturing dropped the most in at least four decades. Further the U.K. economy shrank 1.5% in the first quarter this year and Bank of England said it will keep pumping money into the economy by purchasing government bonds. Lower FTSE markets also pushed pound lower as the former records a decline of 1.14% during the week. The pair ended last week at $ per dollar. No major data releases are there in this week except the house price data. Amid slightly better data from U.S, we expect pound to trade sideways to lower against the dollar. GBP erased previous week s gains and ended on negative note as it failed to sustain the crucial resistance level of 1.49 levels. The prices took strong support at levels and closed at levels. Immediate support is at then levels. Likewise, resistance is at then levels. The prices are trading between 10 and 20 week EMA for last one week and likely to trade sideways for this week. If market breaches crucial resistance at levels, it may move up further to

4 USD/JPY Japanese yen closed above 100 this week, depreciating marginally by 0.07% as collapse in manufacturing and exports prompted government to evaluate further stimulus plans. The yen moved lower last week as higher U.S equity markets signaled renewed demand for higher-yielding assets outside the Asian country. During the week, the Bank of Japan said that it will provide more funds to commercial banks by broadening the range of collateral it accepts in an effort to encourage lending to companies. The bank held the overnight lending rate at 0.1% by a unanimous vote. Coming week, Japan s industrial output and consumer confidence data will be important. Amid optimism over world markets, we expect yen to trade sideways to lower against the greenback. After breaching crucial trend line resistance at , Yen made high of , but ended below this resistance. The immediate resistance is at , breach of same may extend gains towards levels. Prices have closed above 50-week EMA and expected to move up if market sustain above levels. Momentum indicator RSI is treading at 0.58 and has potential to move up. Supports are seen at then levels. For the week ahead, prices are likely to trade firm and likely to touch next resistance levels at levels.

5 WEEKLY QUOTES Majors EUR/USD GBP/USD CHF/USD USD/JPY AUD/USD CAD/USD Asia Pacific USD/INR USD/SGD USD/HKD USD/NZD USD/THB USD/IDR USD/KRW USD/TWD Latin American USD/MXN USD/VEB USD/CLP USD/BRL USD/ARS USD/COP USD/UYU European USD/KKK USD/NOK USD/SEK USD/ISK USD/RUB USD/CZK USD/PLN Africa USD/ZAR USD/EGP USD/KES USD/MUR USD/NGN USD/SDD

6 Upcoming Economic Events Date Time Region Event Period Survey Prior 04/13/ :20 JN Domestic CGPI (MoM) MAR -0.20% -0.40% 04/14/ :00 US Producer Price Index (MoM) MAR 0.00% 0.10% 04/14/ :00 US Advance Retail Sales MAR 0.30% -0.10% 04/14/ :00 US Retail Sales Less Autos MAR 0.10% 0.70% 04/14/ :30 US Business Inventories FEB -1.20% -1.10% 04/15/ :31 UK RICS House Price Balance MAR -77% -78% 04/15/2009 CH Actual FDI YTD YoY MAR % 04/15/ :00 JN Industrial Production (MoM) FEB F % 04/15/ :00 UK DCLG UK House Prices (YoY) FEB % 04/15/ :30 US Bloomberg Global Confidence APR /15/ :00 US Consumer Price Index (MoM) MAR 0.10% 0.40% 04/15/ :00 US Empire Manufacturing APR /15/ :30 US Net Long-term TIC Flows FEB $17.5B -$43.0B 04/15/ :30 US Total Net TIC Flows FEB - - -$148.9B 04/15/ :45 US Industrial Production MAR -0.90% -1.40% 04/15/ :30 US NAHB Housing Market Index APR /16/ :30 CH Real GDP YoY 1Q 6.30% 6.80% 04/16/ :30 CH Producer Price Index (YoY) MAR -5.80% -4.50% 04/16/ :30 CH Consumer Price Index (YoY) MAR -1.30% -1.60% 04/16/ :30 CH Retail Sales (YoY) MAR 14.50% /16/ :30 CH Retail Sales YTD YoY MAR 15.00% 15.20% 04/16/ :30 CH Industrial Production (YoY) MAR 6.30% 11.00% 04/16/ :30 CH Industrial Production YTD YoY MAR 6.80% 3.80% 04/16/ :00 IN Wholesale Price Index YoY 4-Apr % 04/16/ :30 EC Euro-Zone CPI (MoM) MAR 0.40% 0.40% 04/16/ :30 EC Euro-Zone Ind. Prod. sa (MoM) FEB -2.50% -3.50% 04/16/ :00 US Housing Starts MAR 540K 583K 04/16/ :00 US Building Permits MAR 549K 547K 04/16/ :00 US Initial Jobless Claims 12-Apr 660K 654K 04/16/ :30 US Philadelphia Fed. APR /17/ :30 JN Consumer Confidence MAR /17/ :00 JN Nationwide Dept. Sales (YoY) MAR % 04/17/ :30 EC Euro-Zone Trade Balance FEB -5.0B -10.5B 04/17/ :30 EC Construction Output SA MoM FEB % 04/17/ :30 US U. of Michigan Confidence APR P

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