Currencies Daily Report

Thursday| January 10, 2013

Content
Overview US Dollar Euro GBP JPY Economic Indicators
Overview:

Research Team
Fundamental Team Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Currencies Daily Report

Thursday| January 10, 2013

Highlights
German industrial output increased to 0.2 percent in November. UK Trade deficit declined to -9.2B in the month of November Asian markets are trading on a firm note taking cues from the rise in Japanese export earnings as the yen depreciated as the government proposed hopes of raising the inflation target to 2 percent. China new loan witnessed a decline in the month of December to 454B as compared to 523B on the month of October. Chinese trade balance increased to 31.6B in the month of December as export rose by 14.1 percent in the last month as compared to 19.6B in November.

Market Highlights (% change)

Last NIFTY SENSEX DJIA S&P FTSE KOSPI BOVESPA 5971.5 19666.6 13390.51 1461.0 17326.3 1991.8 61578.6 10578.6 85.93 1654.80 3020.10 8066.75 Prev. day -0.5 -0.4 0.5 0.27 6.1 -0.3 9.4 0.7 0.8 -0.4 -0.7 -0.3

as on January 09, 2013 WoW -0.4 -0.2 -0.2 -0.10 2.6 -1.9 -1.6 -0.1 -5.6 -2.0 -2.4 -1.6 MoM 4.3 4.4 1.8 3.03 10.4 1.8 5.3 11.0 2.3 -2.9 -8.6 0.4 YoY 25.9 24.4 8.1 14.08 20.3 9.1 4.2 #N/A -13.2 2.9 5.1 5.8

US Dollar Index
US Dollar Index (DX) gained 0.3 percent due to rise in the risk aversion in the global markets ahead of European Central Bank and bank of England policy meeting scheduled on Thursday and as Spain and Italy conduct first debt sales of the year, disclosing the depth of demand for peripheral euro zone debt. Further, there anticipation of monetary easing by the Bank of Japan to boost the economy also supported an upside in the index. This increased the demand for the low yielding currency that is US Dollar Index. US equities settled higher as the corporate earnings of Alcoa rose and the company was optimistic over the global demand in the near future. This started the US earning season on a positive note. However, investors remained cautious ahead of the Bank of England and European Central Bank meeting to be held on Thursday. The index touched an intra-day high of 80.75 and closed at 80.67 on Wednesday.

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

101.65

0.1

0.7

1.7

-2.1

Source: Reuters

US Dollar (% change)
Last Dollar Index US $ / INR (Spot) US $ / INR Jan13 Futures (NSE) US $ / INR Jan13 Futures (MCX-SX) 80.67 54.80 55.02 55.02 Prev. day 0.3 0.3 -0.38 -0.38

as on January 09, 2013 WoW 0.9 -1.0 0.82 0.82 MoM 0.3 -0.9 0.56 0.57 YoY -0.9 -4.4 4.20 4.20

Dollar/INR
The Indian Rupee continued its appreciation in yesterdays session and settled 0.3 percent on Wednesday. The currency appreciated due to selling of dollars by the exporters and sustained capital inflows. There were reports of selling of dollars by large petrochemical firm yesterday. However, sharp gains in the currency were cushioned on the back of dollar demand from the oil firms. The rupee closed at 54.80 after touching an intra-day high of 54.71 on Wednesday. For the current month 2013 FII inflows totaled at Rs 7662.70 crores th till 09 January 2013. While year to date basis, net capital inflows for the year 2013 stood at Rs. 7662.70 crores. Outlook

Source: Reuters

Technical Chart USD/INR

Source: Telequote

From the intra-day perspective, we expect Indian Rupee to appreciate due to positive global market sentiments along with weakness in the DX. Sustained capital inflows from the foreign institution might also add to the appreciation in the rupee. However, expectation of rise in the trade deficit of the country might cushion appreciation in the currency.

Technical Outlook
Trend US Dollar/INR Jan13 (NSE/MCX-SX) Sideways

valid for January 10, 2013 Support 54.85/54.70 Resistance 55.20/55.35

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Currencies Daily Report

Thursday| January 10, 2013

Euro/INR
Euro swung between gains and losses and ended 0.1 percent lower on Wednesday. Market participants adopted a cautious approach before the European Central Bank meeting scheduled on Thursday. Apart from this the investors remained cautious as Spain and Italy conduct first debt sales of the year, disclosing the depth of demand for peripheral euro zone debt. Strength in the DX also exerted downward pressure on the currency. However, favorable data from the region cushioned sharp fall in the currency. The currency touched an intra-day low of 1.3055 and closed at 1.3063 on Wednesday. German industrial output increased to 0.2 percent in the month of November as compared to -2 percent in October. Outlook In todays session we expect Euro to appreciate on hopes that the European Central Bank might not cut its interest rates along with weakness in the DX. However, favorable data from the region might also add to the gains in the currency. Technical Outlook
Trend Euro/INR Jan13 (NSE/MCX-SX) Sideways 71.60/71.30 72.20/72.60 valid for January 10, 2013 Support Resistance

Euro (% change)
Last Euro /$ (Spot) Euro / INR (Spot) Euro / INR Jan 13 Futures (NSE) Euro / INR Jan13 Futures (MCX-SX) 1.3063 71.64 71.84 71.8 Prev. day -0.1 0.4 -0.79 -0.79

as on January 09, 2013 WoW -0.9 -0.2 -0.53 -0.52 MoM 1.1 -0.8 1.68 1.68 YoY 2.3 #N/A 6.66 6.69

Source: Reuters

Technical Chart Euro

Source: Telequote

GBP (% change)

as on January 09, 2013

GBP/INR
Last Prev. day -0.2 -0.43 -0.57 WoW -1.4 -0.34 -0.62 MoM -0.1 0.82 0.72 YoY 3.6 8.50 8.32

The Pound declined 0.2 percent in yesterdays session owing to expectation that the Bank of England might keep the interest rates and quantitative easing target unchanged but could announce more asset purchases in its meeting scheduled on Thursday. Strength in the DX also added to the losses in the currency. The currency touched an intra-day low of 1.599 and closed at 1.6021 on Wednesday. UK Trade deficit declined to -9.2B in the month of November as compared to -9.5B in the month of October. Trade deficit narrowed owing to rise in the exports more than the imports. Outlook In todays session, we expect Pound to trade with negative bias on the back of expectation that the Bank of England might announce stimulus measures to boost the economy. However, weakness in the DX along with positive global market sentiments is expected to cushion sharp fall in the currency. Technical Outlook
Trend GBP/INR Jan 13 (NSE/MCX-SX) Sideways valid for January 10, 2013 Support 88.10/87.90 Resistance 88/88.78

$ / GBP (Spot) GBP / INR (Spot) GBP / INR Jan13 Futures (NSE) GBP / INR Jan 13 Futures (MCX-SX)

1.6021 87.841 88.26

88.26

-0.57

-0.62

0.72

8.32

Source: Reuters

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Currencies Daily Report

Thursday| January 10, 2013

JPY/INR
JPY (% change) The Japanese Yen depreciated 1 percent in yesterdays session on expectation that Bank of Japan might announce further stimulus measures to boost the economy. Rise in the risk aversion in the global markets however, capped depreciation in the currency. The currency touched a low of 88.01 and closed at 87.87 on Wednesday. Outlook For the intra-day, we expect to yen to depreciated due to rise in the risk appetite in the global market sentiments which is likely to reduce the demand for the low yielding currency. There are also hopes of further stimulus measures to be announced by the Bank of Japan to boost eh economy. This is likely to further depreciate the currency.
Last 87.87 0.6243 62.91 62.90 Prev day 1.0 -1.01 -0.42 -0.44 as on January 09, 2013 WoW 0.6 0.45 -5.24 0.35 MoM 6.6 -5.24 -5.24 -5.25 YoY 14.4 -8.42 -8.49 -8.46

JPY / $ (Spot) JPY / INR (Spot) JPY 100 / INR Jan13 Futures (NSE) JPY 100 / INR Jan13 Futures (MCX-SX)

Source: Reuters

Technical Chart JPY

Technical Outlook
Trend JPY/INR Jan 13 (NSE/MCX-SX) Sideways

valid for January 10, 2013 Support 62.65/62.35 Resistance 63.20/63.50

Source: Telequote

Economic Indicators to be released on January 10, 2013

Indicator New Loans Trade Balance French Industrial Production m/m Asset Purchase Facility Official Bank Rate MPC Rate Statement Minimum Bid Rate ECB Press Conference Unemployment Claims FOMC Member George Speaks Country CNY CNY EU GBP GBP GBP EU EU US US Time (IST) 6:00 am 7:30 am 1:15 pm 5: 30 pm 5: 30 pm tentative 6:15 pm 7:00 pm 7:00 pm 11:40 pm Actual 454 B 31.6 B 361 K 372 K 0.75 % 0.75 % Forecast 550 B 20.1 B 0.2 % 375 B 0.50 % Previous 523 B 19.6 B -0.7 % 375 B 0.50 % Impact Medium High Medium High High High High High High Medium

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