HSL PCG CURRENCY DAILY

02 March, 2017

PRIVATE CLIENT GROUP [PCG]

 STRATEGY FOR THE DAY

EURINR MAR FUT. SELL ARND 71.00 SL 71.25 TGT 70.60

MAJOR CURRENCY CURRENCY VIEW POINT

RUPEE: STRONG START ON CARD

Prev.
Close Chg. % Chg.
Close
Better than expected growth number and strong domestic equity
USDINR 66.83 66.69 0.138 0.21%
DXY INDX 101.91 101.78 0.130 0.13% market unable to hold the gains in rupee as rising odds of a March
EURUSD 1.053 1.055 -0.002 -0.17% Fed rate increase spur gains for dollar. The home currency opened
GBPUSD 1.228 1.229 -0.001 -0.11% at 66.79 and closed at 66.83 per US dollar, down 0.21% from its
USDJPY 114.07 113.73 0.340 0.30% Tuesday's close of 66.69. So far this year, it has risen 1.64%. The
DG USDINR 66.863 66.903 -0.040 -0.06% strength in dollar may further restrict the gain in local currency.
Though, the overall bias for the rupee remains bullish till it closes
GLOBAL INDICES below 67.27.
India's benchmark Sensex index closed at 28,984.49 points, up
Prev. 0.84% or 241.17 points from its previous close. So far this year, it
Close Chg. % Chg.
Close has risen 8.86%.
SGX NIFTY 9010.0 8975.5 35 0.38% Benchmark 10-year yield caps biggest increase in three weeks after
NIFTY 8945.8 8879.6 66 0.75% data late Tuesday showed economic growth in 4Q beat estimate.
SENSEX 28984.5 28743.3 241 0.84% The 10-year bond yield was trading at 6.928%, compared to
HANG-SENG 23889.2 23776.5 113 0.47% Tuesday's close of 6.871%, biggest increase since Feb. 9.
NIKKEI 19610.2 19393.5 217 1.12% The one month non- deliverable forward last quoted at 66.99 from
SHANGHAI 3246.4 3246.9 0 -0.02% yesterdays 67.05 suggesting negative start at domestic bourses.
S&P INDEX 2396.0 2363.6 32 1.37%
With implied volatility near the lowest in last 10 years, INR will
DOW JONES 21115.6 20812.2 303 1.46%
continue to attract carry inflows. The carry-to-vol. ratio looks
NASDAQ 5904.0 5825.4 79 1.35%
particularly attractive in the 1-month NDFs .
FTSE 7382.9 7263.4 119 1.64%
CAC 4960.8 4858.6 102 2.10% Technically, spot USDINR is forming lower highs and lows indicating
DAX 12067.2 11834.4 233 1.97% bearish view with the immediate support at 66.32 and 66.07. The
bias remains bearish till it closes above 67.27.

PRIVATE CLIENT GROUP [PCG]

 Dollar Extends Gain To 7 Week High On Fed Rate Hike Odd Up

The dollar extends gain near a seven-week high early today on growing signs the Federal Reserve is seriously
considering raising interest rates this month. Futures traders are now pricing in a 66% chance of a Fed hike in March,
up from 35% on Wednesday, according to the CME Group's Fed-Watch Tool.
Feds Brainard says rate hike will likely be appropriate soon. Yen selling likely to resume due to expectations for
widening Japan-U.S. interest-rate gap, sending USD/JPY up to 113.94 from around 113.75 before she spoke. Last it
quoted at 114.07.
Data on Wednesday showed that U.S. consumer price inflation jumped in January by 0.4%, the largest increase since
February 2013, while consumer spending rose less than expected in the month, increasing 0.2%.
ICE Dollar index last was fetching 101.87. The index climbed to 101.97 overnight, its highest since Jan. 11.
Investors are closely watching speeches from Fed Chair Janet Yellen and Vice Chair Stanley Fischer on Friday for
further policy clues.

SPOT USDINR DAILY CHART

TECHNICAL OUTLOOK
Technical Observations

USDINR forming lower top lower

bottom on daily scale indicating
continuation of bearish trend.
Momentum oscillators again started
heading lower, indicating weakness
in the trend.
The recent price action suggesting
continuation of bearish trend with
downside 66.32 and 66.07.
The outlook remains bearish till pair
surpasses 67.27 on closing basis.

PRIVATE CLIENT GROUP [PCG]

TECHNICAL LEVELS

Contracts Last Pivot S3 S2 S1 R1 R2 R3 View

USDINR MAR17 67.04 67.04 66.81 66.89 66.96 67.11 67.19 67.26 Short Covering
EURINR MAR17 70.78 70.82 70.50 70.62 70.70 70.90 71.02 71.10 Short Buildup
GBPINR MAR17 82.87 82.89 82.21 82.44 82.66 83.11 83.34 83.56 Short Buildup
JPYINR MAR17 59.02 59.16 58.28 58.62 58.82 59.36 59.70 59.90 Short Buildup

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 67.10 66.79 68.27 66.65 68.86 66.07 66.80 67.07 67.67 67.51 67.28
EURINR 71.19 70.28 73.35 70.28 77.01 70.28 70.51 71.41 71.67 72.37 73.72
GBPINR 84.00 83.04 86.27 82.37 100.49 80.89 83.04 83.51 83.73 83.76 86.74
JPYINR 59.50 58.83 60.49 58.40 68.11 57.25 59.22 59.28 59.06 60.42 62.63

CURRENCY MOVEMENT
Abs Open Chg. in Chg. in
Currency Open High Low Close Volume
Chg. Interest OI Volume
SPOT USDINR 66.79 66.90 66.76 66.83 0.14 -- -- -- --
USDINR MAR. FUT. 67.00 67.11 66.96 67.04 0.10 1623129 -27829 838394 289702
SPOT EURINR 70.50 70.61 70.39 70.42 -0.27 -- -- -- --
EURINR MAR. FUT. 70.94 70.94 70.74 70.78 -0.28 79161 5251 36449 -8133
SPOT GBPINR 82.66 82.80 82.37 82.42 -0.48 -- -- -- --
GBPINR MAR. FUT. 83.02 83.13 82.68 82.87 -0.46 51026 8686 52617 1932
SPOT JPYINR 58.94 59.00 58.72 58.72 -0.71 -- -- -- --
JPYINR MAR. FUT. 59.50 59.50 58.96 59.02 -0.69 19549 4937 43056 25846

PRIVATE CLIENT GROUP [PCG]

 ECONOMIC EVENTS RELEASED

Date Time Country Event Period Survey Actual Prior

03/01/2017 10:30 IN Nikkei India PMI Mfg Feb -- 50.7 50.4

03/01/2017 14:30 EC Markit Eurozone Manufacturing PMI Feb F 55.5 55.4 55.5
03/01/2017 15:00 UK Markit UK PMI Manufacturing SA Feb 55.8 54.6 55.9
03/01/2017 17:30 US MBA Mortgage Applications 24-Feb 68.7k 69.9k 67.9k
03/01/2017 19:00 US PCE Deflator YoY Jan 2.00% 1.90% 1.60%
03/01/2017 19:00 US PCE Core YoY Jan 1.80% 1.70% 1.70%
03/01/2017 20:15 US Markit US Manufacturing PMI Feb F 54.5 54.2 54.3

ECONOMIC EVENTS TODAY

Date Time Country Event Period Survey Prior

03/02/2017 15:00 UK Markit/CIPS UK Construction PMI Feb -- 52.2

03/02/2017 15:30 EC PPI YoY Jan -- 1.60%
03/02/2017 15:30 EC Unemployment Rate Jan -- 9.60%

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]