FX WEEKLY SYNOPSIS

WEEKLY SYNOPSIS 

Currency Pairs WEEKLY CLOSE PRIOR WEEK CLOSE % change
EUR/INR             82.24 82.48 -0.29
GBP/INR 94.37 93.97        0.42
JPY/INR 0.6364 0.6398 -0.53
USD/INR 72.49             72.43 0.08

 

Major highlights: Rupee traded in the 72.43-73.15 range in trucated trading week. Rupee has gained 2 Rupees since Oct 12 th low of 74.45.

-The week was dominated by developments centered around RBI-Govt stand off. RBI board meeting is to be held on Nov 19 th. Govt has clarified that its fiscal situation is sound and is not seeking transfer of RBI reserves. 

-Crude declined further last week. WT1 Crude declined below USD 60. Higher inventory and increased production are reasons for Crude fall.

-India has been given partial exemption by US in Oil purchase from Iran. India will cut down Iranian buying by one third.

-Indian Equities climbed higher as Crude softened and liquidity position eased due to OMO purchases by RBI.

-G-SEC yields declined and USDINR fwd premia fell. 1 year fwd is now close to 4%.

-FII’S invested Rs 940 Cr in Indian Equities on Nov 1 st . FII’S have bought Rs 570 Cr 

of Indian debt securities in Nov till date . On a cumulative basis, FII’S have sold Rupees 36304

Cr of Indian Equities till date for this calendar year and have sold  Rupees 58750 Cr of Indian

debt in this calendar year till date.

-Fed maintained status quo on rates.

-In US midterm elections, Democrats won a majority in Congress. However, Republicans retained majority in senate. This could hamper US President’s push for fiscal stimulus and immigration laws. It is considered as negative for USD or slow down USD rally as Fed can moderate rate hike with possibility of aggressive fiscal measures fading.

-UK Q3 GDP climbed 0.6% Q/Q.

-Chinese exports rose 15.6% yoy in October to USD 217.3B. Imports rose 21.4% yoy to USD 

183.2B. Trade surplus widened to USD 34.0B, below expectation of USD 36.3B.    

Next week important events: Indian IIP and CPI, trade balance for Oct

Projected range for coming week: USDINR: 72.10-73.10, EURINR:81-83.30, GBPINR:93-95.50.

Suggestions: Hedge USD payables on decline to 72.20 and hedge EUR payables 

on decline to 81-81.50. GBPINR exports be hedged partly.

 

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