Highlights

  •  India’s trade deficit rose to $10.56 billion in the month of October.
  •  Japan’s Tertiary Industry Activity fell by 0.2 percent in September.
  •  Indian Rupee depreciated by more than 1 percent yesterday.

Asian markets are trading on a mixed note today on the back of Chinese government allowing private investment in government business. While on the other hand, uncertainty over the QE tapering by the Federal Reserve acted as a negative factor.

US Dollar Index

The US Dollar Index (DX) declined around 0.2 percent yesterday on the back of rise in risk appetite in market sentiments which led to decline in demand for low yielding currency.

However, uncertainty over the QE tapering by the Federal Reserve cushioned sharp fall in the currency. The DX touched an intra-day low of 81.13 and closed at 81.20 on Monday.

Dollar/INR

The Indian Rupee depreciated by more than 1 percent in yesterday’s trading session. The Rupee depreciated on the back of more than expected rise in country’s trade balance data. Further, weak domestic market sentiments along with uncertainty over the QE tapering by Federal Reserve exerted downside pressure on the currency. Also expectations of shutdown in swap window by RBI created for OMC’s acted as a negative factor.

In the later part of the trade, selling of dollars by Reserve Bank of India (RBI) also could not provide respite to depreciation in the Indian Rupee. The currency touched an intra-day low of 63.497 and closed at 63.24 on Monday.

 

India’s trade deficit rose to $10.56 billion in October from $6.7 billion in September. Exports declined to $27.27 billion in October from $27.68 billion in September. Imports jumped to $37.83 billion in October from $34.44 billion in September.

For the month of November 2013, FII inflows totaled at Rs.3314.80 crores ($536.25 million) as on 11th November 2013. Year to date basis, net capital inflows stood at Rs.92248.50 crores ($16735.20 million) till 11th November 2013.

Outlook

From the intra-day perspective, we expect Indian Rupee to trade on a negative note on the back of more than expected rise trade deficit data in yesterday’s trade. Further, mixed market sentiments, expectations of shutdown of swap window by RBI created for OMC’s along with strength in the DX will add downside pressure on the currency. However, in the later part of the trade, sharp downside can be cushioned or reversal can be seen as a result of expectations of rise in industrial production data from the country. Additionally, selling of dollars by central bank can provide some respite to depreciation in the Indian Rupee.

Technical Outlook valid for November 12, 2013

Trend Support Resistance

US Dollar/INR Nov’13 (NSE/MCX-SX)

Up 63.35/63.10 63.95/64.20

Euro/INR

The Euro appreciated around 0.3 percent yesterday on the back of weakness in the DX. Further, upbeat market sentiments in later part of the trade supported an upside in the currency.

However, sharp upside was restricted due to estimates of decline in region’s GDP data during the week. The Euro touched an intra-day high of 1.3416 and closed at 1.3406 on Monday.

Italian Industrial Production gained 0.2 percent in September as compared to a decline of 0.2 percent in August.

Outlook

In today’s session, we expect Euro to trade lower on account of mixed market sentiments along with strength in the DX. Further, expectations of decline in region’s GDP data during the week will add downside pressure on the currency. Additionally, cut of key interest rates by ECB in prior week will act as a negative factor.

Technical Outlook valid for November 12, 2013

Trend Support Resistance

Euro/INR Nov’13 (NSE/MCX-SX)

Up 85.00/84.70 85.65/86.00

GBP/INR

The Sterling Pound declined around 0.2 percent yesterday ahead of the inflation data to be published in today’s trade. However, weakness in the DX coupled with upbeat market sentiments restricted sharp fall in the currency.

The currency touched an intra-day low of 1.5963 and closed at 1.5988 on Tuesday.

Outlook

From the intra-day perspective, we expect Pound to trade on a lower note on account of weak market sentiments. Additionally, strength in the DX will add downside pressure on the currency. Further, expectation of decline in inflation data from the country will cushion sharp downside in the currency.

Technical Outlook valid for November 12, 2013

Trend Support Resistance

GBP/INR Nov’13 (NSE/MCX-SX)

Up 101.50/101.25 102.10/102.50

JPY/INR

The Japanese Yen depreciated around 0.1 percent yesterday on the back of upbeat global market sentiments that led to decline in demand for the low yielding currency. The Yen touched an intra-day low of 99.3 and closed at 99.15 on Tuesday.

Japan’s Tertiary Industry Activity declined by 0.2 percent in September as against a gain of 0.6 percent in August.

Outlook

Depreciation in the Yen is expected in today’s trade as a result of rise in risk appetite in market sentiments which will lead to fall in demand for the low yielding currency.

Technical Outlook valid for November 12, 2013

Trend Support Resistance

JPY/INR Nov’13 (NSE/MCX-SX)

Up 64.00/63.85 64.50/64.80

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