Currency Update for Exporters and Importers :1st August 2018

DAILY FOREX REPORT FOR EXPORTERS AND IMPORTERS

(inter-bank prices below)

One down and three more to go for the central bank meetings this week. Two are there today. Focus will be once again on Trump trade war and his team’s meeting with the Chinese. There is speculation that some of the Trump advisors are proposing to impose $200 billion tariff in Chinese imports. However Trump will take the decision only towards end August.
Any further escalation in Trump and his trade war with Chinese will overshadow all the central bank meeting today and tomorrow. Even the US labour numbers (ADP and Nonfarm payrolls) will be ignored if the Trump trade war results in a tug-O-war between two nations. US dollar Index can rise first and then fall. I believe that it is short term gains for the greenback but long term pains. This quarter the US dollar index should form a long term top and thereafter the slide.

India

April to June fiscal deficit was 68.70% of budgeted target. A nip in the bud for the rupee. Fundamentals are weak for the Indian economy. Global investors are investing in India are potential corporate profitability is expected to rise exponentially over the coming years. Rise in corporate profitability does not imply rise in hiring numbers. On the jobs front, the NDA government has sore back. Trend of the rupee after the RBI meeting will be the key. There can be a big gap between today’s close and tomorrow’s open due to FOMC meet at mid night.

US dollar-Indian Rupee (usd/inr CMP 68.5150):

One Support: 68.3725
One Resistance: 69.6650

o      Only a break of 68.6650 will trigger a rise to 68.7950 and 68.9650.

o      There will be a sell off if usd/inr trades below 68.3725 after the RBI meet.

o      Watch for short covering before the close of the day.

Euro/Indian Rupee (Euro/inr CMP 80.0425):
One Support: 79.8050
One Resistance: 80.3975

o      100 day moving average at 79.9125 is the key support till Friday.

o      There will be a sell off if euro/inr trades below 79.9125

o      Immediate resistance is at 80.3975. There will be another wave of rise over 80.3975.

UK Pound/Indian Rupee (Gbp/inr CMP 89.8450):
One Support: 89.6025
One Resistance: 90.1175

o      It will be either 91.2250 or 88.7725 by tomorrow. There will be nothing in between.

o      Be prepared for 150-200 paisa one way till tomorrow.

o      Low risk exporters and importers should both hedge receivables and payables till Friday.

o      Short term bearish phase will be there only on a fall below 89.3150.

TO VIEW FULL REPORT U NEED TO PAY/SUBSCRIBE

FAQ

Why Do I ask exporters and importers to use trailing stop loss? Some day’s currency markets are very volatile. Trend (short term as well as medium term) change at the flick of coin without any advance warning. In order to make the most of the volatility it is preferable to use trailing stop loss using technical analysis as basis. Those exporters and importers do not wish to take the risk, should take a forward cover or hedge in future and options market if export or import price near cost.