Highlights

  •   US Unemployment Rate rose by 7.3 percent in the month of October.
  • China’s Industrial Production rose 10.3 percent in the last month.
  • German Trade Balance rose to 18.8 billion Euros in September.

Asian markets are trading on a higher note today on the back of favorable US payrolls data coupled with more than expected rise in China’s industrial production data.

China’s Consumer Price Index gained 3.2 percent in October as against a rise of 3.1 percent in September. Industrial Production rose 10.3 percent in October as compared to a gain of 10.2 percent in September.

US Dollar Index

The US Dollar Index (DX) gained around 0.7 percent in the last week on the back of favorable economic data most notably positive GDP from the country. This has fuelled speculation that the Federal Reserve may start QE taper sooner than expected, thereby supporting upside in the DX. Also, the decision by the European Central Bank to cut its key refinancing rate by 25 bps to 0.25 percent acted as positive factor for the greenback. The DX touched a weekly high of 81.58 and closed at 81.39 on Friday.

US Non-Farm Employment Change increased to 204,000 in October from 163,000 in September. Unemployment Rate rose by 7.3 percent in the month of October as compared to a 7.2 percent gain in September. Prelim UoM Consumer Sentiment declined to 72 level in November from 73.2-mark in the month of October.

Dollar/INR

The Indian Rupee depreciated by more than 1 percent in the last week on the back of warning by S&P credit rating agency to cut the India’s credit rating to BBB- from A-3 with a negative outlook, if the new government fails to reverse India’s low growth. Also expectations of shutdown in swap window by RBI created for OMC’s acted as a negative factor.

Further, positive services PMI data, rising FII inflows along with dollar selling by the state run banks could not provide respite to depreciation in the Indian Rupee.

For the month of November 2013, FII inflows totaled at Rs.2958.60 crores ($479.46 million) as on 8thNovember 2013. Year to date basis, net capital inflows stood at Rs.91892.30 crores ($16678.40 million) till 8thNovember 2013.

Outlook

From the intra-day perspective, we expect Indian Rupee to depreciate on the back of expectations of deficit in trade balance data of the country. Further, threat for cut in credit rating on India by S&P will exert downside pressure on the currency. Additionally, dollar demand from importers will act as a negative factor.

Technical Outlook valid for November 11, 2013

Trend Support Resistance

US Dollar/INR Nov’13 (NSE/MCX-SX)

Up 62.80/62.60 63.30/63.60

Euro/INR

The Euro depreciated 0.9 percent in last week as the European Central Bank unexpectedly cut its key refinancing rate by 25 bps to a record low 0.25 percent to boost growth. Also, strength in the DX acted as negative factors.

Further, unfavorable economic data from the region exerted downside pressure on the currency. The Euro touched a weekly low of 1.3295 and closed at 1.337 on Friday.

German Trade Balance rose to 18.8 billion Euros in September from 15.8 billion Euros in August. French Industrial Production slumped by 0.5 percent in September as against a gain of 0.7 percent in August.

Outlook

In today’s session, we expect Euro to trade higher on account of upbeat market sentiments along with weakness in the DX. Further, expectations of favorable industrial production data from the Italy will support an upside in the currency.

Technical Outlook valid for November 11, 2013

Trend Support Resistance

Euro/INR Nov’13 (NSE/MCX-SX)

Up 84.40/84.20 84.60/85.10

GBP/INR

The Sterling Pound gained around 0.6 percent in the last week on the back of positive economic data from the country. Also, the Bank of England maintained its monetary policy stance as widely expected thereby leading to gains in the currency.

However, strength in the DX coupled with mixed global market sentiments capped sharp gains in the Sterling Pound. The currency touched a weekly high of 1.6117 and closed at 1.6015 on Friday.

UK’s Trade Balance declined by 9.8 billion Pounds in September as compared to a decline of 9.6 billion Pound in August.

Outlook

From the intra-day perspective, we expect Pound to trade on a higher note on account of upbeat market sentiments. Additionally, weakness in the DX will support an upside in the currency.

Technical Outlook valid for November 11, 2013

Trend Support Resistance

GBP/INR Nov’13 (NSE/MCX-SX)

Up 101.10/100.80 101.60/101.90

JPY/INR

The Japanese Yen depreciated 0.4 percent last week as the Bank of Japan failed to meet its inflation target of 2 percent even after 6 months of monetary easing.

However, mixed global market sentiments restricted downside movement in the currency. The Yen touched a weekly low of 99.41 and closed at 99.07 on Friday.

Japan’s Current Account declined by 0.13T Yen in September as compared to a gain of 0.35T Yen 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 11, 2013

 Trend Support Resistance

JPY/INR Nov’13 (NSE/MCX-SX)

Up 64.00/63.90 64.40/64.70

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