DXY Index
USDINR
EURUSD
GBPUSD
Other Markets
| Currency | Trend | Exp. Range | Support | Spot | Support | |||||
| Weekly | Fortnightly | S3 | S2 | S1 | R1 | R2 | R3 | |||
| DXY Index | Up | Up | 80.50-81.65 | 80.5 | 80.82 | 81 | 81.21 | 81.36 | 81.52 | 81.65 |
- Greenback continues to move in a positive direction against its rivals as it marked a six month high of 81.24 and closed at 81.21. Market participants are now eyeing on FOMC meet schedule later today.
- On Monday, Pending homes sales of US unexpectedly fell in June marking at -1.1% against 6% earlier as fewer Americans signed contracts to buy previously owned homes, which is a sign that residential real estate is struggling to strengthen.
- Further, Flash service PMI was flat marking at 61.00 against 61.00 earlier. Services output growth unchanged from the series-record high seen in June.
- On following day, Dollar gained strength as US consumer confidence came on strong footing at 90.9 against 86.4 earlier. Consumer confidence increased for the third consecutive month and is now at its highest level since October 2007. Growth in jobs has increased the consumer spending.
- However, S&P/CS Composite-20 HPI y/y marks at 9.3% against 10.8% earlier. Residential real-estate prices rose in the 12 months ended May at the slowest pace in more than a year as a lull in the U.S. housing market limits appreciation.
- US Bourses ended down on Tuesday as equity benchmark was down by 0.42% closing at 16912. S&P500 was down by 0.45% ending at 1969 and NASDAQ was down 0.05% closing at 4442 levels.
- Later today, series of data are set to be released which includes ADP Non-Farm Employment Change, Advance GDP q/q, Advance GDP Price Index q/q, FOMC Statement and Federal Funds Rate.
USDINR
| Currency | Trend | Exp. Range | Support | Spot | Support | |||||
| Weekly | Fortnightly | S3 | S2 | S1 | R1 | R2 | R3 | |||
| USDINR | Neutral | Neutral | 59.87-60.40 | 59.87 | 59.95 | 60.03 | 60.14 | 60.25 | 60.33 | 60.4 |
- With stock market action likely to be muted, the Rupee opened gap down at 60.24 after closing at 60.12 on Monday. This is a short week, with the likelihood of some payment pressure on account of the month end which should keep the rupee weak and likely ranged between 60.05- 60.50. DXY Index has also risen to 81.20 which should keep pressure on the rupee.
- The dollar gained with the DXY upto 81.202 on strong Consumer Confidence numbers at 90.9 versus an expectation at 85.5. Both the Euro and the Sterling were trading lower against the USD after the data release, with the Euro hitting a trough of $1.3404. The yen too is a tad weaker above 102.00 based on lower numbers for factory output in Japan.
- In addition US and Europe have decided to go ahead with broad based sanctions on Russia, despite reluctance from Germany to apply sanctions on one of its leading trading partners. The sanctions will effect trade on equipment for oil and defense sectors as well as prevent Russia?s state run banks from raising capital in European markets.
- US stock markets remained volatile and weak, on geopolitical factors with tensions erupting in Gaza, Libya and Ukraine. Despite calls for a ceasefire from both ends, yesterday was one of the worst days in Gaza with increased shelling from Israeli forces. In other international news, Argentina is probably headed for a default, which could also pressure global markets. Asian markets though have opened strong, except for Shanghai and India, which are both down on some mild profit booking. In early trade, BSE Sensex is down about 20 points while Nifty is at is also down and currently at 7794 levels.
- FIIs have been buying Indian stock and debt and in no month except January-14 has there buying been negative.
- The Rupee will likely be ranged till the RBI policy due on 5th August, despite the fact that no action is likely from RBI as inflation has come down due to base effect and there is a still uncertainity on the effects of the monsoon on food inflation. The dollar however will move in accordance with the ADP Employment report, US GDP Report due later today and also the FOMC meeting and the comments emanating from there.
- Technically speaking, the pair is moving in a stiff range of 59.90-60.30 levels from past 5 trading sessions. Recently it has bounced from the lower level of the range and can now move till the resistance of the range placed at 60.30 levels. There is no clear direction for this pair and as such it will continue to trade in this tight range unless and until there is no clear breakout. RSI still holds the level of 50 and MACD is showing negative signals due to its laggard nature.
EURUSD
| Currency | Trend | Exp. Range | Support | Spot | Support | |||||
| Weekly | Fortnightly | S3 | S2 | S1 | R1 | R2 | R3 | |||
| EURUSD | Down | Down | 1.3352-1.3500 | 1.3352 | 1.338 | 1.34 | 1.3404 | 1.3455 | 1.3475 | 1.35 |
- EUR slumped on Tuesday and closed at 1.3409 declining by 0.23% against USD as dollar was boosted after data released indicated that consumer confidence index in the US climbed seven year high.
- On economic front, in Germany the import prices m/m came at 0.2% against 0.0% earlier but was below market expectations at 0.3% added pressure on Euro.
- Further, Spain retail sales recorded a rise of 0.2%, on an annual basis, lower than market expectations for an advance of 1.1%. It had climbed 0.5% in the previous month.
- ECB Governing Council Member and Bundesbank Chief, Jens Weidmann, welcomed a strong rise in wages in Germany despite inflation pressures in the region continue to be weak.
- European Bourses, CAC and DAX both were up by 0.48% and 0.57% up by 20 and 55 points ending at 4365 and 9653 respectively.
- Later today, German Prelim CPI m/m, Spanish Flash CPI y/y, Spanish Flash GDP q/q, Italian 10-y Bond Auction is expected to release which will guide the movement of Euro.
GBPUSD
| Currency | Trend | Exp. Range | Support | Spot | Support | |||||
| Weekly | Fortnightly | S3 | S2 | S1 | R1 | R2 | R3 | |||
| GBPUSD | Down | Down | 1.6900-1.7162 | 1.69 | 1.6922 | 1.6948 | 1.6945 | 1.7 | 1.7145 | 1.7162 |
- Cable continues to underperform against USD making a low of 1.6933 and closing near day?s low at 1.6946 levels down by 0.22%. Pound lost 200 points in last two weeks.
- On economic front, Net Lending to Individuals m/m was in line with market expectations at 2.5B. Earlier it marked at 3.0B which was higher.
- The number of mortgage approvals for house purchases in the UK rose to 67.2K in June, compared to 62.0K approvals reported in the previous month as banks introduced more stringent checks on borrowers.
- M4 money supply unexpectedly advanced 0.1% in June, on a monthly basis, higher than market expectations for a steady reading. It had dropped 0.1% a month ago.
- Ben Broadbent Deputy Governor of BOE, stated that though the Pound is overvalued by 5% to 10%, but the large current account deficit did not pose any major threat to the nation's economic growth.
- The FTSE yesterday was in green territory up by 19 points; the index was up at 6807 up by 0.29%.
- No data is scheduled to be released today and as such Pound is expected to take cues from US markets.
Other Markets
- India?s 10-year G-Sec -.Ten-year benchmark was higher at 8.49% after the issuance of the new 10 year benchmark bond auction of Rs 7000 crore, which was aggressively bid. The RBI plans to issue another Rs 9000 crore of the 10 year benchmark at 8.40% on August 1. The issue was done in two tranches to bring down the yields from levels of 8.65% to 8.40% levels. Bond yields are likely to remain ranged ahead of the RBI policy meeting on August 5. The Reserve Bank also conducted a seven-day term repo auction of Rs 20,000 crore at a variable rate, on July 30. Additionally it also conducted a one-day reverse repo of Rs 4811 crores at 7%.
- US Treasury Market -:.The ten-year benchmark yield fell to 2.46% on geopolitical factors as investors eyed developments in Gaza, Libya and Ukraine with some trepidation. In addition, Europe prepared to slap more broad based sanctions on Russia for its continued involvement in the Ukraine conflict. German bonds have fallen to the lowest level, with the 10-year benchmark there at 1.120, in response. US Treasuries though got a boost from strong US consumer confidence numbers and a solid $35 billion auction of 5-year notes, despite investor concern on short-term debt ahead of the FOMC meeting today.
- Crude Oil-: WTI Crude oil was steady at $ 101.15 levels as the API reports a 4.4 million barrel decline in crude stocks, amidst geopolitical tension in the Middle East and Ukraine. However, despite the conflict, there has been no supply disruptions in the region, and a perception that the US demand has not been as high as expected, have kept the prices down. Investors will keep an eye on data from US this week, especially the US GDP and the Non farm payrolls number. A confirmation of strong growth in the US would put some pressure on oil prices along with the EIA report tomorrow would determine outlook for this week.
- Gold-:.Gold dipped below $1300, to trade at $1299 as investors stayed on the sidelines ahead of an FOMC meeting later today. US numbers have been strong which have taken up the DXY to 81.22 levels and the markets will look for confirmation of the same in the US GDP data as well as the nonfarm payrolls, due at the end of the week. Geopolitical factors will continue to keep gold supported at this price.
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