HSL PCG CURRENCY DAILY

06 December, 2016

PRIVATE CLIENT GROUP [PCG]

MAJOR CURRENCY VIEW POINT
Prev. Rupee Ends Flat at 68.22 vs. US Dollar, Likely to Trade Positive
Close Chg. % Chg.
Close
USDINR 68.218 68.225 -0.007 -0.01% The Indian rupee yesterday closed at a two week high against the US
DXY INDX 100.070 100.59 -0.520 -0.52% dollar, ahead of the bi-monthly policy of the Reserve Bank of India
EURUSD 1.077 1.071 0.006 0.51% starting today. The rupee closed at 68.22 a dollar--a level last seen on
GBPUSD 1.275 1.272 0.003 0.20% 21 November, up 0.01% from its previous close of 68.23. After strong
USDJPY 113.630 114.25 -0.620 -0.54% start, the local currency weight down on weaker service PMI number.
The Nikkei/Markit Services Purchasing Managers' Index sank to 46.7 in
DG USDINR 68.166 68.343 -0.177 -0.26%
November from October's 54.5, the first time since June 2015 that the
index has gone below the 50 mark that separates growth from
GLOBAL INDICES
contraction.
In the two day MPC monetary policy meet, starting today, rate cut
Prev. seems a done deal as the economy absorbs a hit to growth stemming
Close Chg. % Chg.
Close from the scrapping of high-value bank notes. As moderating food prices
SGX NIFTY 8151.0 8171.0 -20 -0.24% had already stoked expectations for rate cut along with concerns about
NIFTY 8128.8 8086.8 42 0.52% GDP growth have been lingering. Yield on 10-year bond down ~60bps
since banknote ban announced on Nov.
SENSEX 26349.1 26230.7 118 0.45%
Overseas funds slashed holdings of Indian local debt by 90.69b rupees
HANG-SENG 22667.9 22505.6 162 0.72% ($1.3b) yesterday, NSDL data shows. Thats the biggest drop since data
NIKKEI 18370.8 18275.0 96 0.52% going back to April 2013.
SHANGHAI 3203.0 3204.7 -2 -0.05%
S&P INDEX 2204.7 2192.0 13 0.58% Euro Holds Rebound From 20-Month Low
DOW JONES 19216.2 19170.4 46 0.24% Dollar faces selling pressure as market unwinds long positions amid lack
of buying incentives. Market starting to price in uncertainty over
NASDAQ 5308.9 5255.7 53 1.01%
implementation of Trump policies, making it difficult to buy dollar. Wary
FTSE 6746.8 6730.7 16 0.24% of FOMC next week with possibility economy may not warrant as quick a
CAC 4574.3 4528.8 46 1.00% pace of rate hikes that market priced in. Risk aversion could push
DAX 10684.8 10513.4 171 1.63% Japanese Yen higher in near term.
The euro held near a three-week high against the dollar before a
INSTITUTIONAL ACTIVITY (Provisional Rs. In Cr) European Central Bank meeting on Thursday. The euro rebounded
yesterday after plunging to a 20-month low as market participant
Segment 05-Dec-16 02-Dec-16 shrugged off the No vote in the Italian referendum that prompted
Prime Minister Matteo Renzi to offer his resignation
Equity -125.25 -401.04 Focus this week is ECB, which is likely to extend duration of easing. The
Debt -410.80 -1010.45 ECB will announce an extension of asset purchases Thursday at the
current pace of 80 billion euros ($86 billion) a month, according to
Bloomberg estimates. The comments on tapering could boost EUR but
dont think ECB will mention it at this stage.

PRIVATE CLIENT GROUP [PCG]

 TECHNICAL OUTLOOK
SPOT USDINR DAILY CHART

Technical Observations

The spot USDINR is having support at 67.90, concur with 38.20% retracement of rally from 66.3362 to 68.8625.
Momentum oscillators have turned bearish on daily scale, whereas the same on hourly scale it exited from oversold hence can
prompt short covering.
In near term, the pair is having support at 67.90 and 67.60 while continue to face stiff resistance around triple top 68.86. The
short term bias remains neutral to bearish, until 68.86 taken-out.

PRIVATE CLIENT GROUP [PCG]

TECHNICAL LEVELS

Near Month Fut. Last Pivot S3 S2 S1 R1 R2 R3 View For The Day

USDINR 68.34 68.32 68.10 68.17 68.25 68.41 68.48 68.57 Bearish
EURINR 73.17 72.81 71.04 71.51 72.34 73.64 74.12 74.95 Bullish
GBPINR 86.90 86.82 86.10 86.31 86.60 87.11 87.32 87.62 Consolidation
JPYINR 59.91 60.03 59.23 59.54 59.73 60.22 60.53 60.71 Short Covering

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 68.80 68.21 68.86 66.34 68.86 66.07 68.37 67.91 67.19 67.08 67.13
EURINR 73.34 72.44 75.64 71.82 77.49 71.50 72.80 72.91 73.53 74.14 74.76
GBPINR 86.42 85.02 86.88 80.89 101.87 80.89 85.98 84.77 83.67 85.81 90.38
JPYINR 61.50 59.74 66.11 59.64 68.11 53.86 60.17 61.66 63.38 64.41 63.09

CURRENCY MOVEMENT
Open Chg. In
Currency Open High Low Close Chg. Chg. in OI Volume
Interest Volume
SPOT USDINR 68.16 68.27 68.13 68.22 -0.01 -- -- -- --
USDINR DEC. FUT. 68.27 68.39 68.24 68.34 -0.03 1471995 -17295 798012 -63701
SPOT EURINR 71.88 73.09 71.82 73.00 0.36 -- -- -- --
EURINR DEC. FUT. 72.02 73.29 71.98 73.17 0.34 35915 -528 66591 26212
SPOT GBPINR 86.52 86.88 86.42 86.75 0.68 -- -- -- --
GBPINR DEC. FUT. 86.52 87.03 86.52 86.90 0.66 31275 2629 50564 5221
SPOT JPYINR 60.06 60.14 59.64 59.71 -0.18 -- -- -- --
JPYINR DEC. FUT. 60.23 60.34 59.85 59.91 -0.23 29186 2217 27399 8516

PRIVATE CLIENT GROUP [PCG]

ECONOMIC EVENTS RELEASED
Date Time Country Event Period Survey Actual Prior
12/05/2016 07:15 CH Caixin China PMI Services Nov 52.7 53.1 52.4
12/05/2016 10:30 IN Nikkei India PMI Services Nov -- 46.7 54.5
12/05/2016 14:30 EC Markit Eurozone Services PMI Nov F 54.1 53.8 54.1
12/05/2016 15:00 UK Markit/CIPS UK Services PMI Nov 54.0 55.2 54.5
12/05/2016 15:00 EC Sentix Investor Confidence Dec 14.5 10.0 13.1
12/05/2016 20:15 US Markit US Services PMI Nov F 54.9 54.6 54.7
12/05/2016 20:30 US ISM Non-Mfg. Composite Nov 55.2 57.2 54.8

ECONOMIC EVENTS RELEASED

Date Time Country Event Period Survey Prior
12/06/2016 14:40 EC Markit Eurozone Retail PMI Nov -- 48.6
12/06/2016 15:30 EC GDP SA YoY 3Q F 1.60% 1.60%
12/06/2016 19:00 US Trade Balance Oct -$41.6b -$36.4b
12/06/2016 19:00 US Nonfarm Productivity 3Q F 3.20% 3.10%
12/06/2016 20:30 US Factory Orders Oct 2.50% 0.30%
12/06/2016 20:30 US Durable Goods Orders Oct F 0.70% 4.80%

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
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PRIVATE CLIENT GROUP [PCG]