Highlights

  • UK’s BBA Mortgage Approvals fell unexpectedly to 42,800 in Oct’13.
  • US Pending Home Sales declined by 0.6 percent in the last month.
  • The BoJ expressed concerns over reaching the target inflation.

Asian markets are trading on a mixed note today on the back of unfavorable economic data from US in yesterday’s trade led to expectations of delay in QE tapering by the Federal Reserve. While on the other hand, less than estimated rise in Japan’s corporate price index capped sharp positive movement in the markets.

US Dollar Index

The US Dollar Index (DX) gained around 0.3 percent in yesterday’s trade on the back of rise in risk aversion in market sentiments in later part of the trade which led to rise in demand for low yielding currency. Additionally, decline in US pending home sales data supported an upside in the currency.

Further, expectations of delay in QE tapering by the Federal Reserve after weak economic data from the US indicating a slow economic growth capped sharp gains in the currency. The DX touched an intra-day high of 81.06 and closed at 80.96 on Monday.

US Pending Home Sales declined by 0.6 percent in October as against a fall of 4.6 percent in September.

Dollar/INR

The Indian Rupee appreciated around 0.4 percent yesterday for the second consecutive day. The currency appreciated on the back of selling of dollars by corporate and custodian banks. Additionally, rising inflow of foreign funds acted as a positive factor. Further, upbeat global and domestic market sentiments supported an upside in the currency.

Dollar demand from oil refiners and importers capped sharp gains in the currency. Also strength in the DX restricted positive movement in the Indian Rupee. The currency touched an intra-day high of 62.34 and closed at 62.50 on Monday.

For the month of November 2013, FII inflows totaled at Rs.7544.10 crores ($1209.37 million) as on 25th November 2013. Year to date basis, net capital inflows stood at Rs.96477.80 crores ($17408.30 million) till 25th November 2013.

Outlook

From the intra-day perspective, we expect Indian Rupee to trade on a mixed note on the back of upbeat market sentiments coupled with weakness in the DX. Further, selling of dollars by state run banks coupled with rising inflow of foreign funds will support an upside in the currency. Additionally, expectations of rise in country’s GDP data during the week will act as a positive factor. However, sharp upside in the currency will be prevented or reversal can be seen due to dollar demand from corporate and oil firms.

Technical Chart – USD/INR

Technical Outlook valid for November 26, 2013 Trend Support Resistance US Dollar/INR Nov’13 (NSE/MCX-SX) Sideways 62.20/62.05 62.70/62.90

Euro/INR

The Euro depreciated around 0.3 percent in yesterday’s trading session on the back of strength in the DX. Further, weak market sentiments in later part of the trade exerted downside pressure on the currency.

The Euro touched an intra-day high of 1.3559 and closed at 1.3515 on Monday.

Outlook

In today’s session, we expect Euro to trade higher on account of upbeat market sentiments. Further, weakness in the DX will support an upside in the currency.

Technical Chart – Euro

Technical Outlook valid for November 26, 2013

Trend Support Resistance Euro/INR Nov’13 (NSE/MCX-SX) Sideways 84.30/84.10 84.60/84.80

GBP/INR

The Sterling Pound declined by around 0.4 percent yesterday on the back of unfavorable mortgage approvals data from the country.

Also, strength in the DX coupled with weak global market sentiments in the later part of the trade acted as negative factor. The Pound touched an intra-day low of 0.6131 and closed at 1.6153 on Monday.

UK’s British Bankers’ Association (BBA) Mortgage Approvals declined to 42,800 in October from 43,200 in September.

Outlook

From the intra-day perspective, we expect Pound to trade on a positive note on account of optimistic market sentiments. Additionally, a weaker DX will also act as a positive factor for the Sterling Pound. Further, currency will take cues from any major announcement in the inflation report to be announced today.

Technical Chart – Sterling Pound

Technical Outlook valid for November 25, 2013 Trend Support Resistance GBP/INR Nov’13 (NSE/MCX-SX) Sideways 101.00/100.80 101.40/101.60

JPY/INR

The Japanese Yen depreciated by 0.4 percent yesterday as the Bank of Japan (BoJ) expressed concern over reaching the target inflation of 2 percent, thereby indicating monetary easing for a longer period and led to downside pressure on the currency. The Yen touched an intra-day low of 101.91 and closed at 101.66 on Monday.

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. Further, expectations of continuation of monetary stimulus by the central bank to reach its inflation target will add downside pressure on the currency.

Technical Chart – JPY

Technical Outlook valid for November 26, 2013 Trend Support Resistance JPY/INR Nov’13 (NSE/MCX-SX) Down 61.20/61.00 61.60/61.80

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