Currency Update for Exporters and Importers :27th July 2018

DAILY FOREX REPORT FOR EXPORTERS AND IMPORTERS

(inter-bank prices below)

World

European central bank meeting

·       Risks around eurozone growth outlook still 'broadly balanced'

·       Risks related to global factors, including trade, remain 'prominent'

·       Uncertainty around inflation outlook receding

·       EU-U.S. trade talks 'a good sign,' but too early to assess content

·       ECB didn't discuss reinvestment policy in meeting

·       Exchange rate isn't a policy target

Taper by the ECB will be dependent on trade war related growth risk. In case growth is slower due to trade war, then taper by the ECB will get delayed and euro could get another knock down.
Traders will take positions for next week’s key central bank meetings and US nonfarm payrolls. One will get a fairly reasonable idea the number of times Federal Reserve will raise interest rates for the rest of the year and till the first quarter of next year. This will set the direction for the greenback for the rest of the year. Till 3^rd August, currency markets can see trend changing off and on.
Indonesian Rupiah is reflecting fundamental trend. Global investors are fleeing Indonesia due to better returns in neighboring ASEAN bloc nations. In my view all this should end this quarter. From October quarter, all will be well for Indonesian economy.

India

India has seen the largest bond outflows in Asia this year. Bond outflows totaled around $6 billion this year, the heaviest in the region. Only bond market outflows and higher crude oil prices are the negatives for the Indian economy. But these are quite significant for direction of the rupee and interest rate trend of India. Global factors will affect the rupee more than domestic factors over the next one week.

US dollar-Indian Rupee (usd/inr CMP 68.5450):

One Support: 68.2050
One Resistance: 68.7650

o      50 day moving average at 68.2050 is the key support.

o      Trend is down as long as rupee trades below 68.7675.

US dollar/Japanese Yen (usd/jpy CMP 111.00):
One Support: 110.68
One Resistance: 111.39

o      Yen needs to trade over 110.93 to rise to 111.39 and 111.74.

o      Sellers will be there only below 110.93.

o      50 day moving average at 110.71 is the key support.

o      A daily close below 110.71 today will result in 109.51 on Monday.

US dollar/Indonesia Rupiah (usd/idr CMP 14460.00):
One Support: 14401.70
One Resistance: 14475.30

o      Support is between 14360-14390-14405. There will be another wave of sell off below this zone to 14305-14255 and 13960.

o      Rupiah needs to trade over 14475 today to be in intraday bullish zone.

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, crypto currency, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared by Chintan Karnani

NOTES TO THE ABOVE REPORT

PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS

ALL PRICES ARE IN INDIAN RUPEE UNLESS OTHERWISE SPECIFIED

Indian Standard Time (IST): +5:30 GMT

Current Market Price (CMP)

All foreign exchange prices are for inter-bank rates.