Currencies World 10-06-2014 …

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MCX-SX USDINR Jun 2014

Rupee rose tracking a rally in domestic shares to record highs, but broader gains were capped as the Reserve Bank of India (RBI) was spotted buying dollars intermittently through the session to cap gains. Service sector activity in India expanded for the first time in 11 months in May, the results of a survey by Markit Economics and HSBC bank showed. The HSBC Services Business Activity Index came in at 50.2 in May, up from 48.5 in April, helped by a rebound in new orders.

Overseas investors bought shares worth a net 13.69 billion rupees on Thursday, provisional exchange data showed, buying for a fifth straight day and bringing their total purchases to $8.3 billion so far this year. But intervention from the RBI is keeping a lid on rupee gains, sending the currency down 0.1 percent for the week, its second consecutive weekly loss against the dollar.

The RBI’s dollar purchases in the spot market and the corresponding paying in the forwards to offset the impact on liquidity have been pushing up the forward premiums. Rupee benefited as the two main indexes surged more than 1 percent to mark record highs on continued optimism about policy reforms by the new government.

Technically market is under long liquidation as market has witnessed drop in open interest by – 0.24% to settled at 420571 while prices down -0.225 rupee, now USDINR is getting support at 59.035 and below same could see a test of 58.855 level, And resistance is now likely to be seen at 59.38, a move above could see prices testing 59.545.

MCX-SX EURINR Jun 2014

Euro was steady as the single currency recovered from Thursday s announcement of a new series of measures by the European Central Bank, including a 0.10% rate cut. Euro seen under pressure after ECB President Mario Draghi said that the bank is prepared to act swiftly with further monetary easing measures, including asset-backed security purchases, in case of a prolonged period of low inflation.

Speaking at the ECB’s post-policy meeting press conference, Draghi also said that the central bank we will be conducting a series of Targeted Longer Term Refinancing Operations to support bank lending. Germany’s labor costs per hour worked rose a calendar-adjusted 1.1 percent year-on-year in the first quarter, which was the smallest increase since the third quarter of 2010, Destatis said. That came after a 2.2 percent rise in the final three months of 2013.

Gross earnings costs climbed 2.3 percent annually in the first quarter, while non-wage costs declined 3 percent. Germany exports increased notably in April, following declines in the previous two months, figures from Destatis showed. Total exports climbed a calendar-and-seasonally adjusted 3.0 percent monthly in April, following a 1.8 percent decline in March and 1.3 percent fall in February.

Germany’s industrial production recovered in April after declining in March, Destatis reported. Technically market is under fresh selling as market has witnessed gain in open interest by 0.87% to settled at 24074 while prices down – 0.0975 rupee, now EURINR is getting support at 80.69 and below same could see a test of 80.52 level, And resistance is now likely to be seen at 81.07, a move above could see prices testing 81 28

MCX-SX GBPINR Jun 2014

GBP dropped weighed by the release of downbeat U.K trade balance data, while investors turned their attention to an upcoming U.S. nonfarm payrolls report. The U.K. visible trade deficit widened in April reflecting a decline in exports amid rising imports, data from the Office for National Statistics showed. The goods trade deficit increased to GBP 9.6 billion from GBP 8.3 billion in March. The deficit was forecast to widen slightly to GBP 8.6 billion. Exports declined 4.4 percent month-on-month in April to GBP 23.4 billion.

The surplus on trade in services fell to GBP 7.1 billion from GBP 7.2 billion. Consequently, the total trade balance showed a shortfall of GBP 2.5 billion compared with a GBP 1.1 billion deficit posted in March. Separately, the Bank of England said consumer inflation expectations for the next year fell to 2.6% in the first quarter, from 2.8% in the three months to December.

Average house prices in the U.K. rose 3.9 percent month-over-month in May following two months of declines, as demand outstripped supply, according to a report released by Lloyds Banking Group’s Halifax division. The pace of gain in house prices was the highest since October 2002, with the average house price now at 184,464 pounds.

Technically market is under fresh selling as market has witnessed gain in open interest by 10.94% to settled at 27352 while prices down -0.05 rupee, now GBPINR is getting support at 99.58 and below same could see a test of 99.4775 level, And resistance is now likely to be seen at 99.8025, a move above could see prices testing 99.9225.

MCX-SX JPYINR Jun 2014

YEN seen under pressure as firmness in rupee weighed before a U.S. report that will point to a labor-market recovery. The leading index for Japan declined in April, although the drop was not as severe as expected, the results of a survey by the Cabinet office showed. The leading index, measuring perceptions about future economic conditions, came in at 106.6 in April, above forecasts for a reading of 106.1.

This follows a 107.1 score in March. The coincident index, a measure of perceptions on the current economic scenario, fell to 111.1 in April from 114.5 in March. Monetary policy needs to be flexible to achieve a sustainable growth path in the context of price stability, Bank of Japan board member Takehiro Sato said. The BoJ aims to achieve the price stability of 2 percent and maintain it in a stable manner. However, Sato said the price stability target is by no means a rigid and superficial framework that simply aims to raise the inflation rate to reach 2 percent temporarily.

It is necessary to avoid any misunderstanding that the Bank has been solely pursuing a pick-up in prices without due attention to the economy, said Sato. Japanese service sector activity declined at a slower rate in May, reflecting the recent hike in sales tax, a survey by Markit Economics showed.

Technically market is under fresh selling as market has witnessed gain in open interest by 6.41% to settled at 3915, now JPYINR is getting support at 57.735 and below same could see a test of 57.425 level, And resistance is now likely to be seen at 58.21, a move above could see prices testing 58.375.

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