WEEKLY SYNOPSIS: 20/12/2019
Currency Map:
| Currency Pairs | WEEKLY CLOSE | PRIOR WEEK CLOSE | % change |
| USD/INR | 71.12 | 70.81 | 0.43 |
| EUR/INR | 79.01 | 79.17 | -0.20 |
| GBP/INR | 92.82 | 94.83 | -2.12 |
| JPY/INR | 64.97 | 64.76 | 0.32 |
Brent Crude closed at USD 66 VS prior week close of USD 64.93
Nifty closed at 12271 vs prior week close of 12086.
10 Year G-SEC Yield closed at 6.60%.
Major developments:It was a normal trading week for USDINR. The pair traded in the 70.75-71.25 range. It closed at 71.12, registering a gain of 31ps for USD. GBPINR declined 2.12% and EURINR closed with marginal losses.
The week was devoid of major economic news. Pound was sold heavily, Crude climbed and Global Equities rallied.
On Indian economic news, Indian exports contracted 0.3% in Nov, while imports declined -12.7%. Trade deficit expanded to USD 12.1 bn from USD 11 bn in Oct. Trade deficit in this fiscal year till Nov stands at USD 106.8 bn vs USD 133.7 bn during the same period last year.
FII’S nett bought Rs 1163 Cr ofIndian Equities in Dec . FII’S have nett bought Rs 83619 Cr of Indian Equities in this calendar Year till date. FII’S have nett bought Rs 519 Cr of Indian debt securities in Dec. FII’S have nett bought Rs 40263 Cr of Indian debt in this calendar year till date.
Global developments: As 2019 draws to a close, markets may enter into a quiet mode. There are no major central bank meetings. No major economic data is set for release. Liquidity could be thin and hence sharp moves may still be possible.
US and China finally confirmed the phase 1 deal. US Trade representative hinted that signing may happen in Jan 2020. Easing of trade tensions spurred rally in Global Equity markets.
Pound weakened as UK PM hardened his stand by not accepting extension of transition period for trade deal.
On data front,US Q3 GDP growth was finalized at 2.1% annual rate, unrevised, slightly up from Q2’s 2.0%. UK Q3 GDP growth was finalized at 0.4% qoq, revised up from 0.3% qoq.
Chinese industrial production rose 6.2% yoy in November, accelerated from 4.7% yoy and beat expectation of 5.0% yoy.Retail sales rose 8.0% yoy, up from 7.2% yoy and beat expectation of 7.6% yoy. Fixed asset investment rose 5.2% YTD yoy, matched expectations.
Important developments in coming week:
Currency range forecast for coming week:
USDINR:70.50-71.30, EURINR: 78.50-79.30, GBPINR: 92.50-95, JPYINR: 63.50-66.50.
Suggestion: Cover 1 month USD import payables on decline to 70.75/70.55. USD receivables can be hedged at 71.30/71.60. 1 M EURINR payables can be hedged at 78.50. EURINR receivables can be hedged closer to 79.30. GBPINR receivables hedging can be done on any rally to 93.50-94.
