Tag: Currency

Weekly Markets Round Up

beelineadmin

Finally the much talked about FED hike has come. As no surprises, FED rate has been raised and it was as per expectations. But has the after effects of the same sunk in? Index goes up 300 points then down 300 points? Volatility will rule in the days going forward, keep an eye on VIX. Sentiment seems a bit uncertain on the street and plus the December anomaly should be at the back of our minds. (it is a consensus event wherein FIIs sell out and take money home for reporting stronger sheets as US year ending is 31/12/2015).

Technically speaking 25000 SENSEX held up firmly and is a reasonable support as far as charts are concerned. This coincides with 7500-7600 range for NIFTY. Traders looking for opening shorts must see the risk-reward ration which is skewed against them. Does that mean it is time to go long? Well technically no, however adventurous longs can be opened as risk-reward is in longs favour. But be prepared to be chopped as we affirm volatility will rule going ahead.

Fundamentally speaking markets are priced at 20x trailing earnings with a dividend yield of 1.4x. This picture is of a reasonably priced markets. It is neither cheap nor expensive. One can do bottom up fishing looking for reasonably cheap stocks however within the index there are counters available at a good entry point given the current bull run we are having. Troubled counters like DRL have ben languishing at 52-W lows and provide a good entry point for very patient and long term investors.

Currency is interestingly poised for the coming week as there are multiple holidays. Technically oversold for the very near term and fundamentally still adjusting to the FED hike, currency has been all over the place with INR getting stronger session on session. Traders are advised to trade longs and shorts with extreme caution and having said that a decent option strategy such as call and put spreads should give comfort as expiry is round the corner.

 

 

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Currency Insight

Sheetal

Dollar edges up near 2-1/2-month high ahead of Fed outcome

The dollar edged closer to a 2-1/2-month high against a basket of currencies on Wednesday as traders awaited clues from the Federal Reserve about the timing of a U.S. interest rate increase.

A rate hike at the Fed’s two-day policy meeting which ends later on Wednesday is virtually priced out due to underlying concerns over a slowdown in China and the broader impact on global growth.

But many investors still expect the Fed to indicate that interest rates could rise as early as December. The index, which gauges the greenback against six rival currencies, stood at 96.958 , up about 0.1 percent from late U.S. trade and not far from a 2 1/2-month peak of 97.201 scaled on Friday.

Europe’s Quiet Currency War Besets Nations Losing Inflation Grip

From Stockholm, where the Riksbank will publish the minutes of its latest policy meeting on Tuesday, to Prague, Copenhagen and Zurich, officials in countries circling the currency bloc are waiting for the European Central Bank president to say next month whether he’ll expand stimulus. Only then will it be clear whether they’ll need to retaliate with more asset purchases, rate cuts and currency interventions of their own to dig in against imported disinflation.

Draghi’s bonanza of cheap cash is depressing financial returns in the euro area and driving investment flows into neighboring countries, pushing up their currencies and defeating their efforts to hit their own inflation targets. Looser monetary policy is in the cards even in countries where economic growth is strong and asset markets are overheating.

China welcomes IMF backing to make yuan world reserve currency

China on Saturday welcomed backing from IMF experts that the yuan should be included in its reserve currencies, saying the move would strengthen the world’s financial system.

Now the world’s second-largest economy, China asked last year for the yuan to be added to the elite basket of SDR currencies, but until recently it was considered too tightly controlled to qualify.

Important events and their explanation:

 

Time ( IST) Currency Economic Data Actual Expectation
7:00pm USD CPI m/m 0.20% -0.20%
USD Core CPI m/m 0.20% 0.20%
7:45pm USD Capacity Utilization Rate 77.50% 77.50%
USD Industrial Production m/m 0.10% -0.20%
17th-19th USD Mortgage Delinquencies 5.30%

 

Explanation:- Out of these above data US CPI  may decide the medium term trend of the price USD.  Any positive news may be positive for the USD

Quick Glance :

 

Instrument Price %Chg Volume OI
USD/INR 66.00 0.17 788526 960103
EUR/INR 70.86 -0.82 37048 48836
GBP/INR 100.20 0.07 21059 41217
JPY/INR 53.70 -0.64 7908 15311

 

Technical touch :

EURINR

FOREX EURINR_Daily_1Year

As seen pair is trading near its crucial support levels which is at 70.56 levels. Hence we assume any breakout below 70.50 may further weaken the Euro till 70.20 levels and upside strong resistance at 71.40 levels.

 

Currency Insight

Sheetal

Dollar edges up near 2-1/2-month high ahead of Fed outcome

The dollar edged closer to a 2-1/2-month high against a basket of currencies on Wednesday as traders awaited clues from the Federal Reserve about the timing of a U.S. interest rate increase.

A rate hike at the Fed’s two-day policy meeting which ends later on Wednesday is virtually priced out due to underlying concerns over a slowdown in China and the broader impact on global growth.

But many investors still expect the Fed to indicate that interest rates could rise as early as December. The index, which gauges the greenback against six rival currencies, stood at 96.958 , up about 0.1 percent from late U.S. trade and not far from a 2 1/2-month peak of 97.201 scaled on Friday.

Indian rupee ends at one-month low against US dollar, down 32 paise at 65.59

The rupee plunged by 32 paise against the US dollar to one-month low of 65.59 on fresh demand for the American currency from banks and importers amid persistent fall in equity markets coupled with strong foreign capital outflows.

 

The domestic unit opened lower at 65.39 as against last Friday’s level of 65.27 at the Interbank Foreign Exchange (forex) market and dropped further to 65.62 before ending at one-month low of 65.59, showing a loss of 32 paise or 0.49 per cent.

Sterling trades above $1.52, but lags euro on soft UK data

Sterling rose 0.4 percent against a struggling dollar on Tuesday, as investors fretted about when the U.S. Federal Reserve will raise interest rates amid growing doubts over a global recovery.

The International Monetary Fund (IMF) cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and said policies aimed at increasing demand were needed.

Important events and their explanation:
Time ( IST) Currency Economic Data Actual Expectation Previous
USD FOMC Member Lockhart Speaks
7:00pm USD Average Hourly Earnings m/m 0.20% 0.00%
USD Non-Farm Employment Change 179K 142K
USD Unemployment Rate 5.00% 5.10%

 

Quick Glance :
Instrument Price %Chg Volume OI
USD/INR 65.48 0.17 788526 960103
EUR/INR 71.56 -0.82 37048 48836
GBP/INR 100.92 0.07 21059 41217
JPY/INR 54.01 -0.64 7908 15311

 

Technical touch :

FOREX USDINR_Weekly_3Year

We assume USD might depreciate and INR till 65.50

 

Currency Insight

Sheetal

Dollar edges up near 2-1/2-month high ahead of Fed outcome

The dollar edged closer to a 2-1/2-month high against a basket of currencies on Wednesday as traders awaited clues from the Federal Reserve about the timing of a U.S. interest rate increase.

A rate hike at the Fed’s two-day policy meeting which ends later on Wednesday is virtually priced out due to underlying concerns over a slowdown in China and the broader impact on global growth.

But many investors still expect the Fed to indicate that interest rates could rise as early as December. The index, which gauges the greenback against six rival currencies, stood at 96.958 , up about 0.1 percent from late U.S. trade and not far from a 2 1/2-month peak of 97.201 scaled on Friday.

Indian rupee ends at one-month low against US dollar, down 32 paise at 65.59

The rupee plunged by 32 paise against the US dollar to one-month low of 65.59 on fresh demand for the American currency from banks and importers amid persistent fall in equity markets coupled with strong foreign capital outflows.

 

The domestic unit opened lower at 65.39 as against last Friday’s level of 65.27 at the Interbank Foreign Exchange (forex) market and dropped further to 65.62 before ending at one-month low of 65.59, showing a loss of 32 paise or 0.49 per cent.

Sterling trades above $1.52, but lags euro on soft UK data

Sterling rose 0.4 percent against a struggling dollar on Tuesday, as investors fretted about when the U.S. Federal Reserve will raise interest rates amid growing doubts over a global recovery.

The International Monetary Fund (IMF) cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and said policies aimed at increasing demand were needed.

Important events and their explanation:
Time ( IST) Currency Economic Data Actual Expectation Previous
1:00am USD FOMC Member Dudley Speaks
5:20am JPY Monetary Policy Meeting Minutes
6:00am USD FOMC Member Fischer Speaks
7:00pm USD Unemployment Claims 263K 260K
USD FOMC Member Dudley Speaks
USD Prelim Nonfarm Productivity q/q 0.10% 3.30%
USD Prelim Unit Labor Costs q/q 2.20% -1.40%
7:40pm USD FOMC Member Fischer Speaks

 

Explanation:- Market is heading towards one of the most crucial events of the weeks, Unemployment claims and Non farm we actual data might come negative for the USD.

Quick Glance :
Instrument Price %Chg Volume OI
USD/INR 65.48 0.17 788526 960103
EUR/INR 71.56 -0.82 37048 48836
GBP/INR 100.92 0.07 21059 41217
JPY/INR 54.01 -0.64 7908 15311

 

Technical touch :

USDINR

FOREX USDINR_Daily_1Year

As seen pair has pierced its prolonged Ascending triangle and trading above crucial 65.20 levels.

After a surprise move by the Chinese banks rupee depreciated and touched 64.80 levels.  We assume rupee to form a minor resistance at 65.60 levels.

Once can go long TILL 65.70 LEVELS.

Currency Insight

Sheetal

Dollar edges up near 2-1/2-month high ahead of Fed outcome

The dollar edged closer to a 2-1/2-month high against a basket of currencies on Wednesday as traders awaited clues from the Federal Reserve about the timing of a U.S. interest rate increase.

A rate hike at the Fed’s two-day policy meeting which ends later on Wednesday is virtually priced out due to underlying concerns over a slowdown in China and the broader impact on global growth.

But many investors still expect the Fed to indicate that interest rates could rise as early as December. The index, which gauges the greenback against six rival currencies, stood at 96.958 , up about 0.1 percent from late U.S. trade and not far from a 2 1/2-month peak of 97.201 scaled on Friday.

Sterling hits 8-month low vs euro as consumer prices fall

The euro lost ground on Wednesday as data showing euro zone inflation dipped back into negative territory in September fuelled expectations the European Central Bank will expand or extend its asset purchase programme.

The euro fell 0.4 percent to $1.1205, and was down 0.7 percent against the British pound, although it remained on track for a quarterly gain against the dollar.

“A weak number was expected and bolsters expectations that the ECB may have to expand its asset purchase programme from the 60-billion-euros-a-month to something larger, perhaps by year-end,” said Richard Falkenhall, currency strategist at SEB.

“That is negative for the euro, but a lot depends on how stock markets behave. If stocks drop, then the euro is likely to be supported as they are going in opposite ways.”.

Sterling trades above $1.52, but lags euro on soft UK data

Sterling rose 0.4 percent against a struggling dollar on Tuesday, as investors fretted about when the U.S. Federal Reserve will raise interest rates amid growing doubts over a global recovery.

The International Monetary Fund (IMF) cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and said policies aimed at increasing demand were needed.

Important events and their explanation:
Time ( IST) Currency Economic Data Actual Expectation Previous
All Day EUR German Prelim CPI m/m -0.10% -0.20%
1:30pm EUR Spanish Flash CPI y/y -0.60% -0.90%
2:25pm EUR German Unemployment Change -4K 2K
3:00pm GBP Net Lending to Individuals m/m 4.4B 4.3B
6:00pm USD Advance GDP q/q 1.60% 3.90%
USD Unemployment Claims 264K 259K
USD Advance GDP Price Index q/q 1.50% 2.10%
6:40pm USD FOMC Member Lockhart Speaks FOMC Member Lockhart Speaks
7:30pm USD Pending Home Sales m/m 1.10% -1.40%

 

Explanation:- Out of the above mentioned data , Market may react more on US unemployment numbers and Pending home sales. We assume both the data will come as per the expectations, hence this would be neutral for the USD. All eyes are on the upcoming FOMC statement.

Quick Glance :
Instrument Price %Chg Volume OI
USD/INR 64.92 0.17 788526 960103
EUR/INR 71.82 -0.82 37048 48836
GBP/INR 99.25 0.07 21059 41217
JPY/INR 53.93 -0.64 7908 15311

 

Technical touch :

 

Dollar Index

usd\

Today we will discuss INR movement based on Dollar index. As seen Dollar index is forming a perfect bullish pattern on its weekly chart, and touched its above falling resistance line. We assume dollar index might fall in the coming days near its base. This would be positive for the INR for few trading sessions. Range :- 64.88-65.20

 

Morning Business News Round up_September 08, 2015

beelineadmin

Morning Business News :

  • Undisclosed Foreign A/Cs: CBDT Issues Compounding Rules
  • Rupee Must Fall More To Save Exports, Prevent China Dumping
  • Sequoia To Become Largest India-Focussed VC Fund
  • JP Morgan AMC Goes Into Damage Control Mode
  • RBI Has Less Stringent Norms On Systemically Important Banks: Moody’s
  • Retail Investments Into Indian Shares Show Jump
  • Reliance Defence In Pact With UAE’s ADSB
  • JSW To Acquire JP’s Bina Thermal Power Rs 3,500 Cr
  • India Inc Set To Discuss Global Crisis With PM Today
  • Over A Fifth Of FMCG Products In India Are Fake Or Smuggled
  • Mukesh Ambani Likely To Exit Navi Mumbai SEZ
  • Currency Volatility Impacts Pharma Companies’ Earnings
  • OBC, IOB, YES Bank To Be Most Affected By New Base Rate Methodology: Moody’s
  • No Proposal To Merge Chennai Petroleum With IOC: B Ashok
  • ONGC: Multiple Gains From Russian Oil Deal
  • Firms With Annual Turnover Of Rs 25 Lakh Might Not Attract GST
  • China Forex Reserves Fall Record $93.9 Bn In Aug
  • LIC Taking Advantage Of Market Fall, Buying Stocks: Chairman
  • Shanghai Stock Exchange To Tighten Rules On Options Trading

images

  • Australian Partner UGL Intends To Exit Jt Venture With Texmaco
  • Oilmeal Exports Dips 42% On Low Crushing
  • Kalpataru Power To Raise Rs. 300 Cr Via NCD Route
  • Poor Demand, Excess Supply Sends Coal Off-Take Ratio To Multi-Year Lows
  • Default Fears Rise As Rs800 Crore Amtek Bonds Set To Mature
  • BSNL To Increase Minimum Broadband Speed To 2 Mbps
  • Govt Tells Coal Power Plants To Subsidize 15GW Of Solar Power
  • Havells Mulls India Purchases, Sees Revival
  • India Eyes Energy Assets Abroad In Low Price Regime
  • India Ranks Low On Inclusive Growth: World Economic Forum
  • Draft Base Rate Guidelines Credit Negative For Banks: Moody’s
  • Maharashtra Govt To Abolish LBT On Petrol And Diesel Within 15 Days
  • Trai To Be Fair: Let’s Be Clear, Telcos Stand To Lose From Call Drops
  • New Oil & Gas Policy Shifts Risks To Developers: Report
  • Liquid, Money Market Mfs Witness Rs 70,000 Cr Outflow
  • Markets To Remain Volatile In Sept-Nov: Bofa-ML
  • Rupee Slips By 36 Paise To 2-Year Low At 66.82 Against $
  • Govt To Set Up Low-Cost Non-Major Ports To Boost Trade
  • India Rejects Pfizer’s Patent Application For Arthritis Drug
  • Japanese Paint Nippon Is Betting On Green Products

 

Currency Insight

Sheetal

EUR/USD drops further to 1.1450

After hitting fresh multi-week tops in the boundaries of 1.1300 the figure overnight, the pair has surrendered part of those gains and has returned to the 1.1250/45 area in response to the mixed preliminary PMIs from France and Germany.

Spot continues to derive support from diminishing market expectations of a Fed’s lift-off in September – now with December as the most likely candidate – following the dovish tone from the FOMC minutes on Wednesday.
On the Greek front, market participants perceive Tsipras stepping down as EUR-supportive as well, as that could facilitate the negotiations with the international creditors. .

GBP/USD: Breakout turns into Fakeout, drops to 1.5650

The spot turned lower from the 7-week high of 1.5819 seen on Tuesday after China’s rate cut pushed the markets into stabilization mode. The USD was ditched on Monday, leading to an upside breakout in the GBP/USD pair from the multi-week range of 1.5460-1.5690 levels.

The focus now shifts to the US durable goods figure for July. The market expects the headline figure to print at -0.4% from June’s 3.4%. However, the markets would be more interested to see if core durable goods have ticked higher .

Pound falls to 2-week lows vs. stronger dollar

The pound fell to two-week lows against the U.S. dollar on Tuesday, as expectations for a U.S. rate hike in the coming months continued to lend broad support to the greenback.

GBP/USD hit 1.5385 during European morning trade, the pair’s lowest since May 8; the pair subsequently consolidated at 1.5415, sliding 0.36%. Cable was likely to find support at 1.5241, the low of May 8 and resistance at 1.5591, the high of May 20. The dollar was boosted after Federal Reserve Chair Janet Yellen reiterated Friday that the bank still expects to start raising interest rates later in the year if the economy continues to improve as expected.

 

Important events and their explanation:

 

Time ( IST) Currency Economic Data Actual Expectation Previous
1:30pm EUR M3 Money Supply y/y 4.90% 5.00%
6:00pm USD Prelim GDP q/q 3.20% 2.30%
USD Unemployment Claims 275K 277K
7:30pm USD Pending Home Sales m/m 1.30% -1.80%

Explanation:- After a dramatic last week, Dollar tried to maintain its lost ground. We assume US data’s might meet the street s expectation , hence expect a minor depreciate in the dollar till 1.1520.

Quick Glance :
Instrument Price %Chg Volume OI
USD/INR 66.12 0.17 788526 960103
EUR/INR 75.77 -0.82 37048 48836
GBP/INR 103.54 0.07 21059 41217
JPY/INR 55.42 -0.64 7908 15311
Technical touch :

USDINR pair touched its 2015 lows and fell till 67 levels but soothe after the RBI intervention. As seen weekly chart forming a shooting start pattern, this pattern is running hence we will wait till 66.35 levels. Is pair is able to close near 66.10 levels, . If this happens, USDINR might fall till 65.50 levels.

FAQs_Currency

beelineadmin

♦  What is Currency Derivatives?

 Currency Derivatives are Future and Options contracts which you can buy or sell specific quantity of a particular currency pair at a future date. It is similar to the Stock Futures and Options but the underlying happens to be currency pair (i.e. USDINR, EURINR, JPYINR OR GBPINR) instead of Stocks. A future contract of USDINR of expiry 27th Jan, 2015 will be represented by symbol ‘FUTCUR-USDINR-27JAN2015’. A call option contract of USDINR of expiry 27th Jan, 2015 for Strike Price ‘63’ will be represented by symbol ‘OPTCUR-USDINR-27JAN2015-63-CE’.

♦ What are the benefits of trading in Currency Derivatives?

 Currency Derivatives are very efficient risk management instruments and you can derive the below benefits:

  1. Hedging: You can protect your foreign exchange exposure in business and hedge potential losses by taking appropriate positions in the same. For e.g. If you are an importer, and have USD payments to make at a future date, you can hedge your foreign exchange exposure by buying USD INR and fixing your pay out rate today. You would hedge if you were of the view that USD INR was going to depreciate. Similarly it would give hedging opportunities to Exporters to hedge their future receivables, Borrowers to hedge foreign currency (FCY) loans for interest and principal payments, Resident Indians, who can hedge their offshore investments.
  2. Speculation: You can speculate on the short term movement of the markets by using Currency Futures. For e.g. If you expect oil prices to rise and impact India’s import bill, you would buy USD INR in expectation that the INR would depreciate. Alternatively if you believed that strong exports from the IT sector, combined with strong FII flows will translate to INR appreciation you would sell USD INR.

    3.  Arbitrage: You can make profits by taking advantage of the exchange rates of the currency in different                         markets and different exchanges.

    4.   Leverage: You can trade in the currency derivatives by just paying a % value called the margin amount                         instead of the full traded value.

    ♦  What categories of Currency Derivatives contracts are offered for trading through Beeline                       Broking Ltd.

 Future and Option contracts in Currency derivatives have been introduced in India. Trading in Currency derivatives through Beeline Broking Ltd. is presently offered in both Future and Option contracts in NSE and BSE.

     ♦ What are Currency Futures Contracts?

 Currency Futures contracts are legally binding agreement to buy or sell a financial instrument sometime in future at an agreed price. Currency Future contracts are standardized in terms of lots and delivery time. The only variable is the price, which is discovered by the market. Currency Futures contracts have different expiry validity and will expire after the completion of the specified tenure.

     ♦ Who is eligible to trade in Currency Derivatives?

 All Resident Indians as defined in section 2(v) of the Foreign Exchange Management Act, 1999 (FEMA, Act 42 of 1999) are eligible to trade in the Currency Derivatives segment. For participation by regulated entities, concurrence  from  respective  regulators should be obtained. Currently, trading facility in Currency Derivatives at I-Sec will be offered to all Resident Individuals / HUFs / eligible Corporates fulfilling the FEMA criteria.

      ♦ What is the date of expiry?

 All Currency contracts expire two working days prior to the last business day of the expiry month at 12 noon.

      ♦ What are the trade timings of Currency trading?

 Currency Derivatives the trade timings in  exchanges are as follows: Trading Session- Monday to Friday- 9:00 AM to 5:00 PM.

      ♦  Can Currency futures help small traders?

 Yes. The minimum size of the USD INR futures contract is USD 1,000. Similarly EUR INR future contract is EURO 1000, GBP INR future contract is GBP 1000 and JPY INR future contract is YEN 1,00,000. These are well within the reach of most small traders. All transactions on the Exchange are anonymous and are executed on a price time priority ensuring that the best price is available to all categories of market participants irrespective of their size. As the profits or losses in the futures market are also paid / collected on a daily basis, the scope of accumulation of losses for participants gets limited.

      ♦  How is Currency Price determined?

 Currency prices are affected by a variety of economic and political conditions, but probably the most important are interest rates, international trade, inflation, and political stability. Sometimes governments actually participate in the foreign exchange market to influence the value of their currencies. They do this either by flooding the market with their domestic currency in an attempt to lower the price or, conversely, buying in order to raise the price. This is known as central bank intervention. Any of these factors, as well as large market orders, can cause high volatility in currency prices. However, the size and volume of the FOREX market make it impossible for any one entity to drive the market for any length of time.

      ♦  How are the margin charged in currency Future and Option Contracts?

 Generally, Currency futures and options contracts require a margin percentage of the contract value, i.e. defined by exchange. The exchange also requires the daily profits and losses to be paid in/out on open positions (Mark to Market or MTM) so that the buyers and sellers do not carry a risk for not more than one day.

      ♦  Can I use same margin to trade in both Equity and Currency segment?

 Yes, same margin can be used to trade in both Equity and Currency segment.

       ♦  Will I have single login id to access both equity and Currency trading account?

 Yes, you can trade in Equity, F&O, Commodity and Currency segment by logging in to our single integrated trading platform – or can login to our trading website with same login id and password.

       ♦  I am an existing equity customer; do I need to open a separate trading account for currency?

 No, you don’t need to open a separate trading account for currency trading. You have to place a request to enable currency trading permissions along with submission of required documents. You can visit the nearest branch; can contact your relationship manager or call at Client Helpline Number: …..

        ♦  What are the risk involved in currency trading

 Risks in currency futures pertain to movements in the currency exchange rate. There is no rule of thumb to determine whether a currency rate will rise or fall or remain unchanged. A judgment on this will depend on the knowledge and understanding of the variables that affect currency rates.

        ♦  If I am an individual with no exposure to foreign exchange risks, does a currency futures                         exchange mean anything to me?

 Yes, it does, if you want to invest purely as an investor. You can benefit from exchange rate fluctuations just as you can benefit by investing in equities in the stock market. However, as in the stock markets, you also stand to lose money if the price movements are not in keeping with what you had anticipated. Participating in a currency futures exchange is risky, just as the stock market is. You should therefore be knowledgeable about the currency market if you want to participate as an investor.

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Currency Insight ( May 22, 2015)

Sheetal

Rigging of Foreign Exchange Market Makes Felons of Top Banks

For the world’s biggest banks, what seemed like the perfect business turned out to be the perfect breeding ground for crime. The trading of foreign currencies promised substantial revenues and relatively low risk. It was the kind of activity that banks were supposed to expand after the 2008 financial crisis. No one government agency is responsible for policing the currency market, leaving it up to committees, some run by the banks themselves, to set guidelines. And even when federal authorities adopted rules to rein in Wall Street a few years ago, they exempted certain foreign exchange transactions, a little-noticed concession to banks.

USD/JPY declines after BoJ holds

Japan left its monetary policy unchanged and as the previous session’s U.S. data continued to dampen demand for the greenback. USD/JPY hit 120.67 during late Asian trade, the pair’s lowest since May 20; the pair subsequently consolidated at 120.69, shedding 0.29%. The pair was likely to find support at 119.80, the low of May 19 and resistance at 121.48, the high of May 20. At its monthly policy meeting, the BoJ kept its monetary policy on hold and signaled growing confidence in the strength of the economy.

Asia stocks mostly rise as dollar gains after robust US data

Asian stocks were mostly higher Wednesday as a rebound in U.S. home construction and a surprise announcement by the European Central Bank to frontload bond buying sent the greenback higher, giving a boost to Asian exporters.

EUR/USD halts skid as investors monitor Greek developments in Riga

Investing.com — EUR/USD inched up on Thursday halting a four-day skid, as the timing of an interest rate hike by the Federal Reserve and the prospect of a Greek default on its sovereign debt remained in focus The pair gained .0017 or 0.15% to 1.115, trading in a tight range of 1.1081 and 1.1181. One session earlier, the euro fell below 1.11 against the dollar for the first time in the month of May. EUR/USD opened the week at 1.1447. EUR/USD likely gained support at 1.1070 the low from April 30 and was met with resistance at 1.1326 the high from May 19.

On Thursday night, European leaders convened in Latvia for a two-day summit in Riga. Greece prime minister Alexis Tsipras, Germany chancellor Angela Merkel and France president Francois Hollande were expected to discuss a potential extension to the euro zone’s bailout to Greece, according to reports. Currency traders reacted to disappointing economic on both continents Thursday, on a day of choppy trading.

Important events and their explanation:
Time ( IST) Currency Economic Data Expectation Previous
5:30am USD FOMC Member Fischer Speaks 49.4 48.9
9:19am USD FOMC Member Williams Speaks 48.6 48
1:00pm JPY Monetary Policy Statement 51.9 52.1
 2:30pm JPY BOJ Press Conference 0.40% -0.50%
EUR ECB President Draghi Speaks
3:00pm EUR German Ifo Business Climate 108.3 108.6
4:15pm GBP Public Sector Net Borrowing 7.8B 6.7B
5:30pm GBP MPC Member Shafik Speaks
7:00pm GBP BOE Gov Carney Speaks
USD CPI m/m 0.10% 0.20%
8:00pm USD Core CPI m/m 0.20% 0.20%
EUR ECB President Draghi Speaks
GBP BOE Gov Carney Speaks
11:30pm JPY BOJ Gov Kuroda Speaks
USD Fed Chair Yellen Speaks

Explanation:-

JPY –  BOJ event is too important for the ahead sessions, because looking at the growth numbers we BOJ might not signal any further QE hence negative for markets.

GBP –  We expect it to remain same, any change would create significant impact on GBP.

USD-  Market is heading for the most important event of the week i.e Fed chairman speaks. We assume a dovish tone this time means positive for bullions.

Technical touch :

NSE-CUR USDINR 27MAY2015_2Hour_6Month

 

As seen pair is trading near its crucial support of rising trend line in a 120 mins chart. Intrestingly its also forming a bearish flag pattern but tredline not yet pierced.

For the next few sessions we assume if pair pierced its 63.68/64 levels the next downside target would be 63.38 levels.

Support is expected to be around 63.40/50 levels and resistance 64.00/30 levels.

EUR INR

FOREX EURINR_2Hour_3Month\

After a prolonged downtrend pair tried to form its base and RSI moved into bullish territory.

As seen RSI is trading near its rising trend line. Hence we assume INR might appreciate till 70.55/40 levels

Support is expected to be around 70.38/69.90  levels and resistance 71.63/78  levels.

 

 

Currency Insight ( May 21, 2105)

Sheetal

Dollar up, bond yields fall as Fed rate hike appears further out

The dollar rose and U.S. Treasury yields fell on Wednesday after minutes from the latest Federal Reserve meeting bolstered expectations that U.S. interest rates will remain near zero until later in 2015.The minutes, released ahead of a much anticipated speech on Friday by Fed Chair Janet Yellen, showed that many officials at the April 28-29 meeting believed it would be premature to raise rates in June. Officials were concerned about soft consumer spending, though most Fed members expect the U.S. economy to pick up pace after a slowdown in the first quarter.

Record fines for currency market fix

Five of the world’s largest banks are to pay fines totalling $5.7bn (£3.6bn) for charges including manipulating the foreign exchange market. Four of the banks – JPMorgan, Barclays, Citigroup and RBS – have agreed to plead guilty to US criminal charges.

The fifth, UBS, will plead guilty to rigging benchmark interest rates. Barclays was fined the most, $2.4bn, as it did not join other banks in November to settle investigations by UK, US and Swiss regulators. Barclays is also sacking eight employees involved in the scheme. US Attorney General Loretta Lynch said that “almost every day” for five years from 2007, currency traders used a private electronic chat room to manipulate exchange rates.

Asia stocks mostly rise as dollar gains after robust US data

Asian stocks were mostly higher Wednesday as a rebound in U.S. home construction and a surprise announcement by the European Central Bank to frontload bond buying sent the greenback higher, giving a boost to Asian exporters.
Equities gain, euro slumps as ECB eyes faster bond buys

U.S. and European equities rose to trade near record highs on Tuesday, and the euro tumbled on signals the European Central Bank may accelerate its 1 trillion euro bond-buying programme over the next two months. The dollar gained 1.5 percent against the euro and was broadly ahead for a second day, while U.S. Treasuries prices fell after data showed that U.S. housing starts in April rose to the highest in nearly 7-1/2 years.

Oil prices slumped more than 3 percent, partly because of the dollar rally. Wall Street’s Dow Industrials index closed at an all-time high, though other major U.S. stock indexes mostly eased in choppy trading, unsettled by disappointing Wal-Mart results and fears the housing data might encourage Federal Reserve policymakers to move sooner on interest-rate hikes.

Important events and their explanation:
Time ( IST) Currency Economic Data Expectation Previous
8:15am CNY HSBC Flash Manufacturing PMI 49.4 48.9
 1:30pm EUR French Flash Manufacturing PMI 48.6 48
2:00pm EUR German Flash Manufacturing PMI 51.9 52.1
3:00pm GBP Retail Sales m/m 0.40% -0.50%
6:00pm EUR ECB Monetary Policy Meeting Accounts
7:00pm USD Unemployment Claims 271K 264K
8:30pm USD Existing Home Sales 5.23M 5.19M
USD Philly Fed Manufacturing Index 8.1 7.5

 

USD –  If Unemployment claim comes with a higher number, positive for bullions and for INR.

USD –  Home sales again a very important event, we assume actual might come less than the expected, hence again a negative for dollar

EUR-  ECB Monetary meeting might remain status quo, means rates might remain unchanged. Negative for Euro.

Technical touch :

NSE-CUR USDINR 27MAY2015_2Hour_6Month

As seen pair is trading near its crucial support of rising trend line in a 120 mins chart. Intrestingly its also forming a bearish flag pattern but tredline not yet pierced.

For the next few sessions we assume if pair pierced its 63.68/64 levels the next downside target would be 63.38 levels.

Support is expected to be around 63.40/50 levels and resistance 64.00/30 levels.

EURINR

FOREX EURINR_Daily_1Year

 

After a prolonged downtrend pair tried to form its base and RSI moved into bullish territory.

As seen RSI is trading near its rising trend line. Hence we assume INR might appreciate till 70.55/40 levels

Support is expected to be around 70.38/69.90  levels and resistance 71.63/78  levels.