HSL PCG CURRENCY DAILY

29 December, 2016

PRIVATE CLIENT GROUP [PCG]

 VIEW POINT
STRATEGY FOR THE DAY Rupee Sag Down To One Month Low On Foreign Fund Outflow

Rupee plunges to one month low against the US dollar on consistent

USDINR JAN FUT. CONSOLIDATION RANGE 68.60 TO 68.20 selling by foreign institutional investors in the local equity and debt
markets. This was the second consecutive sessions when the rupee
fell. The home currency closed at 68.24 per US dollar- a level last seen
on 1 December, down 0.27% from its previous close of 68.06. The 10-
MAJOR CURRENCY
year bond yield closed at 6.584%, compared to Tuesday's close of
6.615%.
Prev. The one month forward NDF USDINR last quoted at 68.39 from
Close Chg. % Chg.
Close yesterdays 68.42 when domestic market closed, indicating flat to
USDINR 68.240 68.058 0.182 0.27% weak open. However, weakness in domestic equity market, foreign
DXY INDX 103.080 103.34 -0.260 -0.25% fund outflow and month end dollar demand could drag rupee lower
EURUSD 1.043 1.042 0.001 0.12% today.
GBPUSD 1.224 1.223 0.001 0.07%
Dollar Sinks Against Yen After US Yields Fall To 2 Week Low
USDJPY 116.86 117.74 -0.880 -0.75% The dollar sagged against the yen early today as U.S. yields dropped
DG USDINR 68.437 68.390 0.047 0.07% overnight to two-week lows, but the greenback managed to hold
steady against the euro and pound. Treasury yields fell in the wake of
GLOBAL INDICES weaker-than-expected pending home sales data and a robust debt
auction.
Prev. Bank of Japan releases the summary of opinions from the Dec. 19-20
Close Chg. % Chg. meeting at which it left monetary policy unchanged and raised its
Close
assessment of the economy. One member, who dissented with the 10-
SGX NIFTY 8033.5 8063.5 -30 -0.37% year JGB yield target being set at around zero, said the yield should be
NIFTY 8034.9 8032.9 2 0.02% allowed to fluctuate wider than the range the market believes is in
SENSEX 26210.7 26213.4 -3 -0.01% effect, to the upside in particular. One member said there is a long
HANG-SENG 21685.7 21754.7 -69 -0.32% way to go to meet the BOJs 2% price target, and its important for the
BOJ to maintain current policy stance
NIKKEI 19207.2 19401.7 -195 -1.00%
The dollar was down 0.75% to 116.860 yen from yesterdays 117.74 5
SHANGHAI 3092.5 3102.2 -10 -0.32% pm IST, having come down from a high of 117.815 touched overnight.
S&P INDEX 2249.9 2268.9 -19 -0.84% At domestic bourses, JPYINR will open with gap up and expected to
DOW JONES 19833.7 19945.0 -111 -0.56% witness short covering during the day. The pair likely to get resistance
NASDAQ 5438.6 5487.4 -49 -0.89% around 58.90 in todays session with support of 58.10.
US NAR said its pending home sales index tumbled by 2.5% to 107.3
FTSE 7106.1 7068.2 38 0.54%
in November after inching up by 0.1% to a revised 110.0 in October.
CAC 4848.0 4848.3 0 -0.01% The dollar index was down 0.25% at 103.08 from yesterdays 5pm
DAX 11475.0 11472.2 3 0.02% IST, but still in reach of a 14-year high of 103.650 struck last week.

PRIVATE CLIENT GROUP [PCG]

 TECHNICAL OUTLOOK

SPOT USDINR DAILY CHART

Technical Observations

USDINR continues upward move in yesterdays trade with the pair adding 0.27% or 18 paise to close at 68.25.
The pair has sharply rebounded without filling Gap Up 67.70 indicating strength in near term.
Momentum oscillators showing sign of strength on daily scale.
The pair is having resistance at 68.49, the upper band of the Bollinger band and recent bottom support around 67.70.
Technical evidence indicating bullish bias for the pair. We advise trader and importer to go long/hedge on correction with expected
higher side of 68.49 and 68.87.

PRIVATE CLIENT GROUP [PCG]

TECHNICAL LEVELS

Contracts Last Pivot S3 S2 S1 R1 R2 R3 View For The Day

USDINR JAN17 68.42 68.38 68.18 68.23 68.33 68.48 68.53 68.63 Consolidation
EURINR JAN17 71.45 71.57 70.92 71.18 71.31 71.71 71.96 72.10 Sell On Rally
GBPINR JAN17 83.84 83.95 83.01 83.36 83.60 84.19 84.54 84.78 Sell On Rally
JPYINR JAN17 58.29 58.32 57.99 58.11 58.20 58.41 58.53 58.62 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 68.07 67.71 68.86 67.33 68.86 66.07 67.97 67.89 67.56 67.18 67.09
EURINR 71.22 70.42 73.35 70.42 77.49 70.42 71.01 71.66 72.53 73.68 74.39
GBPINR 84.70 83.07 86.88 83.07 100.49 80.89 83.42 84.82 83.96 85.21 89.47
JPYINR 57.90 57.45 62.38 57.25 68.11 54.86 57.88 58.47 61.14 63.31 62.99

CURRENCY MOVEMENT
Open Chg. in Chg. in
Currency Open High Low Close Chg. Volume
Interest OI Volume
SPOT USDINR 68.05 68.25 68.04 68.24 0.18 -- -- -- --
USDINR JAN. FUT. 68.29 68.44 68.29 68.42 0.16 1452241 279247 1601219 1012309
SPOT EURINR 71.22 71.52 71.01 71.07 -0.09 -- -- -- --
EURINR JAN. FUT. 71.47 71.82 71.43 71.45 0.00 33538 8063 38959 20035
SPOT GBPINR 83.67 83.91 83.32 83.44 -0.03 -- -- -- --
GBPINR JAN. FUT. 83.90 84.30 83.71 83.84 -0.04 32634 9819 41279 32039
SPOT JPYINR 57.87 58.07 57.86 57.94 -0.07 -- -- -- --
JPYINR JAN. FUT. 58.30 58.44 58.23 58.29 -0.05 28640 11969 31472 15599

PRIVATE CLIENT GROUP [PCG]

 ECONOMIC EVENTS RELEASED
Date Time Country Event Period Survey Actual Prior

12/28/2016 15:00 UK BBA Loans for House Purchase Nov 41400 40659 40851

12/28/2016 20:30 US Pending Home Sales NSA YoY Nov -- 1.40% 0.20%

ECONOMIC EVENTS RELEASED

Date Time Country Event Period Survey Prior

12/29/2016 12:30 UK Nationwide House Px NSA YoY Dec 3.80% 4.40%
12/29/2016 19:00 US Advance Goods Trade Balance Nov -$61.5b -$61.9b
12/29/2016 19:00 US Wholesale Inventories MoM Nov P 0.10% -0.40%
12/29/2016 19:00 US Retail Inventories MoM Nov -- -0.40%
12/29/2016 19:00 US Initial Jobless Claims 24-Dec -- 275k
12/29/2016 19:00 US Continuing Claims 17-Dec -- 2036k
12/29/2016 20:15 US Bloomberg Consumer Comfort 25-Dec -- 46.7

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]