Currencies World 03-06-2014 …

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MCX-SX USDINR Jun 2014

Rupee weakened after trading in a tight band for much of the session as month-end dollar demand from oil importers offset the large dollar inflows seen towards Yes Bank’s share sale. India’s fiscal deficit during the 2013/14 fiscal year that ended in March was 5.08 trillion rupees ($86.08 billion), or equivalent to 4.5 percent of the country’s gross domestic product, government data showed.

The deficit is lower than the downwardly revised estimate of 4.6 percent provided by the government in the federal budget in February and is narrower than 4.9 percent a year earlier. Traders will now focus on the central bank’s monetary policy review next week which will be key in helping get some clarity on the central bank’s thoughts on the outlook for inflation and rates. Earlier on Friday, RBI chief Raghuram Rajan said he expected to join hands with the country’s new government to bring down high inflation.

He also said the new government’s plan to curb food inflation seems sensible and that he expected the public’s inflation expectations to fall in the future. Data showed foreign exchange reserves in the week to May 23 fell $2.27 billion, the biggest weekly fall since the week to Jan. 3.

Technically market is under fresh buying as market has witnessed gain in open interest by 0.03% to settled at 350991 while prices up 0.0625 rupee, now USDINR is getting support at 59.24 and below same could see a test of 59.06 level, And resistance is now likely to be seen at 59.48, a move above could see prices testing 59.54.

MCX-SX EURINR Jun 2014

Euro settled flat as Thursday’s downbeat U.S. economic growth data continued to weigh on demand for the greenback. German retail sales fell unexpectedly in April after rising for three consecutive months, reinforcing the assessment that economic growth will slow in the second quarter. Retail sales turnover fell by a real 0.9 percent from March, when it was up 0.1 percent, data from Destatis showed Friday.

Sales were expected to rise by 0.2 percent. Meanwhile, retail sales grew 3.4 percent on a yearly basis, rebounding from the 1.1 percent drop in March. The rate also exceeded 1.5 percent rise expected. The European Central Bank is widely expected to ease monetary policy when it meets next week, after its president Mario Draghi suggested as much this month.

Italy’s harmonized consumer price inflation slowed unexpectedly in May, preliminary estimate from the statistical office Istat showed. The harmonized index of consumer prices rose 0.4 percent year-on-year in May, slightly slower than the 0.5 percent increase posted in April. The rate was expected to remain at 0.5 percent. Similarly, consumer price inflation eased marginally to 0.5 percent from 0.6 percent a month ago. Prices were forecast to rise by 0.6 percent.

Technically market is under short covering as market has witnessed drop in open interest by -3.73% to settled at 21782 while prices up 0.07 rupee, now EURINR is getting support at 80.5875 and below same could see a test of 80.3275 level, And resistance is now likely to be seen at 80.96, a move above could see prices testing 81.0725.

MCX-SX GBPINR Jun 2014

GBP seen supported after report that showed the Gfk consumer confidence index in the UK economy improved to its highest level since April 2005 in the month of May. An index measuring consumer sentiment in the United Kingdom came in with a score of 0 in May, polling company GfK said. The U.K. government said the Help to Buy scheme is continuing to successfully target the people who need a helping hand.

A report released by the HM Treasury showed that about 7,313 homes have been completed under the Help to Buy mortgage guarantee scheme of the government. However, the figure represents only 1.3 percent of all residential mortgage completions in the nation till the end of March. Figures showed Britain’s housing market may be cooling, prompting some of the more aggressive bets on the timing of the first Bank of England rate hike to be scaled back.

Financial markets still widely expect the BoE to be the first major central bank to raise interest rates following emergency post-crisis rate cuts to virtually zero. Investors will look for fresh evidence on the state of the housing market, when the Bank of England releases its mortgage lending data for April on Monday.

Technically market is under short covering as market has witnessed drop in open interest by -1.05% to settled at 22090 while prices up 0.2825 rupee, now GBPINR is getting support at 99 and below same could see a test of 98.7625 level, And resistance is now likely to be seen at 99.4375, a move above could see prices testing 99.6375.

MCX-SX JPYINR Jun 2014

JPY settled flat after a slew of data that painted a mixed picture of the economy after a sales tax hike came into effect in April, with consumer prices jumping, but household spending and industrial production down. April national core CPI rose 3.2%, compared to expectations for a gain of 2.9% on year, an 11th straight year-on-year rise and the highest since July 1991 due to the April consumption tax hike to 8% from 5%.The April unemployment rate held steady at 3.6%, unchanged from March.

Household spending fell 4.6%%, more than the drop of 3.2% expected on year in real terms. It was the first decline in two months after a gain of 7.2% in March. Japan’s April industrial output fell 2.5% in April, more than the drop of 2.0% expected month-on-month. Expectations for a step-up in the pace of BOJ quantitative easing are currently running low, which is one reason the yen has recently been strengthening.

Data did little to dissipate lowered expectations for further BOJ easing, with Japan’s core consumer prices jumping 3.2 percent in April from a year earlier and posting 11th straight month of annual gains. Yen-buying pressure could gain further momentum if Prime Minister Shinzo Abe’s administration fails to unveil a convincing economic growth plan in June, Ishikawa said.

Technically market is under long liquidation as market has witnessed drop in open interest by -23.64% to settled at 3591 now JPYINR is getting support at 58.1775 and below same could see a test of 58.0825 level, And resistance is now likely to be seen at 58.395, a move above could see prices testing 58.5175

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