The rupee remained volatile against the dollar due to strength in the dollar index and positive US economic data, touching a one-month low. Domestically, weak market sentiments and poor manufacturing and services PMI data weighed on the rupee. The rupee is expected to trade weakly against the dollar next week due to high US Treasury yields, a stronger dollar, and the Fed's tapering of bond purchases. Technically, the USD-INR pair has broken out of a bullish pattern and may rise to 63.35 in the coming week. FIIs invested Rs. 132.56 crore in the Indian market. India's fiscal deficit reached 94% of the budget target in April-November.

1. CURRENCY OUTLOOK
6th January, 2013
SWASTIKA INTELLIGENCE GROUP
MARKET OVERVIEW
Rupee remained volatile this week taking cues from
strength in the dollar index and more than expected
positive economic data from USA. Higher treasury yield in
the US also led to weakness in rupee which touched its
one month low against the dollar this week but recovered
a little after possible intervention by the RBI.
Domestically, weak Indian market sentiments and poor
manufacturing and services PMI data which stood at 50.7
and 48.5 respectively.
FIIs invested a total of Rs. 132.56 crores in the cash and
derivatives market of India on Friday.
USD INR
Rupee gained 0.13 percent against the dollar in futures
on Friday and closed at 62.1725. The spot rate is
currently at 62.16.
India's fiscal deficit in the April-November period
reached 94 per cent of the targeted budgetary estimate
of Rs 5.42 lakh crore.
Dollar Index closed at 80.8680 rising by 0.30 percent
from the previous close.
The benchmark US 10-year note yield remained near 3
percent for the week. It reached 3.05 percent yesterday,
the highest since July 2011, before ending the day at
2.99 percent.
Overall, we expect the rupee to trade on a week note
against the dollar taking cues from poor domestic
market sentiments, high US treasury yields, stronger
dollar index and Fed Tapering by $10 billion in January
2014.
Technical Outlook: As seen on the daily chart, USDINR
has breached the down sloping trend line resistance and
has also given a breakout from the bullish inverse head
and shoulders formation. It is likely that the counter has
taken support at 62.51 levels and will bounce upwards
till the resistance at 63.35 mark in the coming week. If it
comes back into the channel below 62.51, then 62.01 is
a crucial support.
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After declining for two weeks, India's foreign exchange
reserves rose by $204.9 million to $ 295.71 billion in the
week ended December 27 on the back of an increase in the
core currency component.
The reserves had declined by $12.6 million in the previous
reporting week to $295.50 billion.
Foreign currency assets (FCAs), which form a major part
of the overall reserves, shot up by $164.3 million to
$268.634 billion in the week under review, the Reserve
Bank said.

2. CURRENCY OUTLOOK
6th January, 2013
SWASTIKA INTELLIGENCE GROUP
EUR INR
In the futures rupee gained 0.17 percent against the Euro
and closed at 85.5425 on Friday. The spot rupee closed at
84.48.
European Central Bank said that Euro Zone M3 Money
Supply rose to 1.5%, from 1.4% in the preceding month.
The dollar largely held on to gains against the euro and
the pound this week, boosted by expectations that U.S.
economic growth this year will outpace the recovery in
Europe and other regions.
Overall, it is expected that rupee will trade on a neutral to
negative note against the Euro due to positive economic
data from the Euro zone. However, strength in dollar
index causing international weakness in Euro may cap
sharp gains in Euro in India.
Technical Outlook: As seen on the daily chart EURINR is
trading in a range since the past many trading sessions
and is taking support at 85.31 level. On the upside, 85.89
is a crucial resistance for the counter and 85.06 is a crucial
support on the downside.
GBP INR
In the futures rupee lost 0.11 percent against the GBP on
Friday and closed at 102.6700. The spot rupee closed at
102.06.
The U.K.’s Nation-wide house price index rose morethan-expected last month. U.K. house prices rose to 1.4
percent, from 0.7 percent in the preceding month whose
figure was revised up from 0.6 percent. The Markit/CIPS
construction PMI fell to 62.1 in December from
November's reading of 62.6.
Overall, we expect rupee to trade on a neutral to
negative note against the GBP taking cues poor domestic
market sentiments. However, weakness in pound due to
less than expected positive economic data from UK may
cap sharp gains in the pound.
Technical Outlook: As seen on the weekly chart,
GBPINR is moving in an upwards sloping channel. It is
likely that the counter will move higher till the 104
mark in the coming week. On the downside, 102.42 is a
crucial support.
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3. CURRENCY OUTLOOK
6th January, 2013
SWASTIKA INTELLIGENCE GROUP
JPY INR
IMPORTANT ECONOMIC DATA TODAY
In the futures rupee gained 0.09 percent against Yen,
and closed at 59.22 on Friday. The spot rate of JPY INR is
currently at 59.29.
Currency
For the week, the dollar was down 0.9 percent against
the yen, putting the greenback on track for its first
weekly loss versus the yen since late October.
GBP
We expect Yen to trade on a neutral to negative range
bound against the rupee depending on the performance
of Japanese markets after a weeklong break. However
positive bias in Yen is expected due to its strengthening
against the dollar and weak domestic market
sentiments.
Technical Outlook: As seen on the daily chart, JPYINR
is moving higher since the past two days. It is likely that
the counter will head upwards till the 60.55 levels. On
the down side, 58.88 is a crucial support for the counter.
Event
German Prelim CPI m/m, Spanish
Services PMI, Italian Services PMI
Services PMI
ISM Non-Manufacturing PMI,
Factory Orders m/m
EUR
USD
KEY STATISTICS: 3rd January 2013
RBI REFERENCE RATES: ALL CURRENCIES
Currency
Rate
Previous close
%
Change
USD INR
62.4075
61.9020
0.82
GBP INR
102.5355
102.7418
-0.20
EUR INR
85.1950
85.1556
0.05
JPY INR
59.9000
58.7900
1.89
ONLINE TRADE: ALL CURRENCIES
Instrument
Underlying
Futures
Options
Futures
Futures
Futures
USD INR
USD INR
GBP INR
EUR INR
JPY INR
Total
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Turnover
(Cr)
Open
Interest
3236.31
755.78
451.28
468.88
126.44
5038.69
719147
342675
37310
51825
9535
1160492

4. CURRENCY OUTLOOK
6th January, 2013
SWASTIKA INTELLIGENCE GROUP
CURRENCY TRACKER: 6th January 2013
CURRENCY
CONTRACT
S2
S1
USDINR
January
62.0100
62.2400
EURINR
January
84.7700
GBPINR
January
JPYINR
January
Report Prepared by
Sonakshi Bahety
RESEARCH TEAM
Ronak Choubey
Santosh Meena
Amit Khare
Vishnu Shreekar
Saloni Gupta
LTP
R1
R2
62.5475
62.7500
62.9500
85.0900
85.3575
85.6900
85.8900
103.3900
102.7800
103.0000
103.4000
103.6800
59.2200
59.5800
59.9050
60.2000
60.4400
Designation
Research Associate
E-mail ID
sonakshi.bahety@swastika.co.in
SWASTIKA INTELLIGENCE GROUP
Fundamental Analyst
Derivative & Technical Analyst
Commodity Analyst
Commodity Analyst
Research Associate
research@swastika.co.in
ronakchoubey@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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