1. CURRENCY OUTLOOK
17th February, 2014
SWASTIKA INTELLIGENCE GROUP
MARKET OVERVIEW
Rupee strengthened against the dollar and Yen while
depreciated against the Pound and Euro in the past week
due to weakness in the dollar index and international
strength in Pound and Euro.
Domestically, lower than expected WPI and CPI Inflation
data along with reduced industrial de-growth helped the
rupee to outperform its peers. Towards the end of the
week, recovery in the domestic and global markets gave a
positive boost to the currency.
India's foreign exchange reserves surged by $1.26 billion
to $292.33 billion in the week ended February 7 on the
back of a healthy increase in currency assets.
WPI in January eased to an eight-month low of 5.05 per
cent, helped by a moderation in food prices. WPI
inflation was at 6.16 per cent in December compared
with 7.52 per cent in November. January's inflation rate
is the slowest since May 2013, when wholesale prices
increased 4.58 per cent.
The industrial production growth rate remained in the
negative zone for the third month in a row, contracting
0.6 per cent in December 2013, mainly on sluggishness
in the manufacturing sector.
FIIs sold securities worth net Rs. 432.4 crores in the
cash and derivatives segment of the Indian equity
markets on Friday.
January CPI inflation slowed to 24-month low of 8.79
percent. But core retail inflation remained sticky at
around 8 percent.
USD INR
Rupee gained 0.66 percent against the dollar in futures
on Friday and closed at 62.06. The spot rate is currently
at 61.92.
Dollar Index closed at 80.1360 down 0.23 percent from
the previous close.
US import prices ticked up by 0.1 percent last month,
the third consecutive month of gains. U.S. Capacity
Utilization Rate fell unexpectedly to 78.5%, from 78.9%
in the preceding month whose figure was revised down
from 79.2%.US industrial output fell 0.3 per cent in
January in a surprise downturn, partly due to severe
weather in parts of the country last month.
UoM consumer sentiment remained unchanged at a
seasonally adjusted 81.2, from 81.2 in the preceding
month. Analysts had expected UoM consumer sentiment
to fall to 80.6 last month.
Overall, we expect rupee to trade on a stronger note
against the dollar due to weakness in the dollar index, less
positive than expected economic data from USA and
positive global and domestic market sentiments.
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Technical Outlook: As seen on the daily chart, USDINR
is taking support at an up sloping trend line at 62.08
level. If it breaches the support, then it is likely to head
towards the 61.40 mark. However if it bounces upwards
from this level, then 62.68 will be a crucial resistance on
the upside.

2. CURRENCY OUTLOOK
17th February, 2014
SWASTIKA INTELLIGENCE GROUP
EUR INR
In the futures rupee gained 0.49 percent against the Euro
and closed at 84.9675 on Friday. The spot rupee closed at
84.67.
French GDP increased 0.3 percent from the previous
quarter and slightly beat expectations. German GDP grew
0.4 percent in 2013's fourth quarter, up from the previous
three months. Italy's economy grew in the final three
months of 2013 for the first time in 10 quarters,
expanding 0.1% in inflation-adjusted terms from the
previous quarter.
A flash estimate for quarterly growth in Gross Domestic
Product, or GDP, in Europe showed that the economy
grew by 0.3 percent in the 17-nation euro area and by 0.4
percent in the 28-nation European Union, or EU.
Overall, we expect the rupee to trade on a neutral to
negative note against the Euro taking cues from improving
recovery in the Euro zone and international strength in
the Euro. However, upbeat domestic market sentiments
can cap sharp gains in the Euro.
Technical Outlook: As seen on the intraday chart,
EURINR has bounced from the resistance at 85.50 mark. It
is likely that the counter will head downwards till the
support at 84.56.
GBP INR
In the futures rupee gained 0.27 percent against the GBP
on Friday and closed at 103.6525. The spot rupee closed
at 103.57.
Positive assessment of the UK economy by BoE Director
and an upward revision of growth helped push the
pound to new highs in the international market. Sterling
traded up near its highest in nearly three years against
the dollar on Friday as investors added to long bets on
expectations that the Bank of England could be the first
major central bank to hike interest rates.
Overall, we expect rupee to trade on a neutral to
negative against the pound due higher paced recovery of
UK economy and international strength in Pound.
However, positive domestic market sentiments can cap
sharp gains in the Pound.
Technical Outlook: After edging higher for the past five
days, a shooting star candlestick formation is seen on
the daily chart of GBPINR. It is likely that the counter
will shed off its gains marginally where 102.98 is an
important support. On the upside, 105 is a crucial
resistance level.
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3. CURRENCY OUTLOOK
17th February, 2014
SWASTIKA INTELLIGENCE GROUP
JPY INR
In the futures rupee gained 0.56 percent against Yen,
and closed at 60.9700 on Friday. The spot rate of JPY
INR is currently at 60.83.
Japan’s wholesale prices rose 2.4 percent in January
from a year earlier for the 10th straight monthly gain as
the yen’s depreciation boosted import costs for energy.
We expect rupee to trade on a neutral to positive note
against the Yen due to positive domestic and
international
market
sentiments.
However,
international strength in Yen due to positive economic
data from Japan and weakness in the dollar index will
cap sharp gains in the rupee. The movement in the pair
will also be affected by the prelim GDP data from Japan
to be released on Monday.
Technical Outlook: As seen on the daily chart, JPYINR
bounced from the resistance at 61.50 mark. It is likely
that the counter will head downwards and 60.40 will be
a crucial support level below which it can test the levels
of 60.00.
IMPORTANT ECONOMIC DATA TODAY
Currency
Time
Event
JPY
5:20 AM
Prelim GDP q/q
JPY
5:20 AM
Prelim GDP Price Index y/y
EUR
-
Euro-group Meetings
KEY STATISTICS: 14th February 2014
RBI REFERENCE RATES: ALL CURRENCIES
Currency
Rate
Last Rate
% Change
USD INR
62.2770
62.2725
0.01
GBP INR
103.6663
103.4658
0.19
EUR INR
85.1755
84.8710
0.36
JPY INR
61.2200
61.0200
0.33
ONLINE TRADE: ALL CURRENCIES
Instrument
Underlying
Turnover
(Cr)
Open
Interest
Futures
USD INR
7435.21
747065
Options
USD INR
1904.37
452320
Futures
GBP INR
622.23
43484
Futures
EUR INR
487.13
68140
Futures
JPY INR
169.53
10251
10618.47
1321260
Total
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4. CURRENCY OUTLOOK
17th February, 2014
SWASTIKA INTELLIGENCE GROUP
CURRENCY TRACKER: 17th February 2014
CURRENCY
CONTRACT
S2
S1
USDINR
February
61.6100
61.8900
EURINR
February
84.2300
GBPINR
February
JPYINR
February
R1
R2
Outlook
62.0850
62.5300
62.6800
Sideways to Bearish
84.6000
85.0375
85.5000
85.9000
Sideways to Bearish
102.9800
103.4000
103.7000
104.1600
104.4400
Sideways to Bearish
60.4100
60.7100
61.0100
61.3800
61.6900
Sideways to Bearish
Report Prepared by
Sonakshi Bahety
RESEARCH TEAM
Santosh Sahu
Santosh Meena
Amit Khare
Vishnu Shreekar
Saloni Gupta
LTP
Designation
Research Associate
E-mail ID
sonakshi.bahety@swastika.co.in
SWASTIKA INTELLIGENCE GROUP
Research Head
Derivative & Technical Analyst
Commodity Analyst
Commodity Analyst
Research Associate
research@swastika.co.in
santosh.sahu@swastika.co.in
santosh.meena@swastika.co.in
amit.khare@swastika.co.in
vishnu.shreekar@swastika.co.in
salony.gupta@swastika.co.in
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