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April 08, 2015
Euro plunged on weak data and concern over Greece bailout
News and development
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Spanish Services PMI increased to 57.3 levels in March from 56.2 marks in February
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Italian Services PMI rose to 51.6 marks in March from 50.0 levels in February
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Europe Final Services PMI declined to 54.2 levels in March from expectation of 54.3 marks
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UK Services PMI increased to 58.9 levels in March from 56.7 levels in February
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US JOLTS Job Opening increased to 5.13M in February from 4.97M in January
US DOLLAR INDEX (DX)
INR pairs
Pair Name
Pre. close
Net Chg (%)
USD-INR
62.56
0.10%
EUR-INR
67.96
-1.00%
GBP-INR
93.20
-0.22%
JPY-INR
52.16
-0.64%
Major indices
Indices
Pre. close
Net Chg (%)
17875.42
-0.03%
Nifty
8660.30
0.00%
Dax
12123.52
1.30%
Nikkei
19640.54
1.25%
Dow Jones
Major currencies
Currency
LTP
EUR-USD
1.0812
GBP-USD
1.4810
USD-JPY
120.3210
Commodities
Commodity
Brent crude USD/bbl
Gold USD/t oz
LME 3-month copper
LTP
59.10
1209.2
6065
US Dollar increased by 1.13 percent in yesterday’s trading session on the back of
strong economic data from US. US JOLTS Job Opening increased to 5.13M in February from 4.97M in January. However, a sharp gain was capped on the back of
weak Non-Farm payrolls data on Friday. Economy added fewer jobs than expected.
Weak job data pushed back investor’s expectation of early rate hike by US Federal Reserve.
USD-INR: The Indian rupee depreciated by 0.12 percent in yesterday’s trading
session on the back of strong dollar globally after positive economic data from
US. Further, increase in demand for dollar from importers amid rebound in crude
oil prices. Indian Rupee tracked weakness in other Asian Currencies. Meanwhile,
RBI at its first bi-monthly monetary policy 2015-16 maintained status quo. In
intraday Indian Rupee touched a low of 62.40 and closed at 62.26 against Dollar.
Outlook: Indian Rupee is expected to trade with negative bias on the back of
strong dollar globally. Further, investors will remain cautious ahead of FOMC
meeting minutes. Rise in demand for dollar from importers after rebound in
crude oil prices may hurt rupee. Indian Rupee may track weakness in other Asian
Currencies. Dollar buying from lower levels may be witnessed. However, rise in
risk appetite in the global markets may prevent sharp fall in Rupee. USDINR April
expected to trade in a range between 62.35 on lower side to 62.80 on higher side
with upward trend.
EUR-INR: Euro depreciated by 1.09 percent in yesterday’s trading session on the
back of strong dollar after positive economic data from US. Further, disappointing
economic data from euro zone added downside pressure. Europe Final Services
PMI declined to 54.2 levels in March from expectation of 54.3 marks. Additionally,
Divergence in the global monetary policy and worries over Greece bailout weighed
on euro. Euro remained under pressure amid uncertainty regarding Greece payment to IMF. In intraday Euro touched a low of 1.0801 and closed at 1.0812 against
Dollar.
Outlook: Euro currency expected to remain under pressure on the back of strong
dollar. Further, expectation of decline in retail sales may add downside pressure. Worries over Greece bailout and uncertainty regarding Greece payment to
IMF may hurt euro. Greece and international creditors are negotiating but no
formal agreement has been reached. IF Greece repays IMF it will run out of
money. Greece owes the International Monetary Fund more than €460 mil on a
morning view (currency)
loan from its 2010 bailout. Additionally, divergence in Global monetary policy may add downside pressure. US Federal Reserve
refrain from early rate hike but signaled rate hike could be by June, whereas ECB started its QE program to fight against deflation
and revive economic growth. EURINR April expected to trade in a range between 67.2 on lower side and 68.3 on higher side with
downward trend.
GBP-INR: Pound depreciated by 0.51 percent in Yesterday’s trading session despite of service growth accelerated to seven month
high due to strength in dollar globally amid strong economic data from US. Further, uncertainty over UK general elections added
downside pressure. Market expects Bank of England to maintain its monetary policy unchanged on Thursday. In intraday Pound
touched a low of 1.4801 and closed at 1.4810 against Dollar.
Outlook: Pound is expected to trade under pressure due to strong dollar globally. Further, uncertainty over UK general elections
may add downside pressure. General elections are scheduled to take place on May 7 and most of the polls show no clear majority
with the result of hung parliament. Market expects Bank of England to keep its monetary policy unchanged on Thursday. Investors
will remain cautious ahead of FOMC meeting minutes. However, sharp downside may be cushioned on the back of strong economic
data. GBPINR April expected to trade in a range between 92.4 on lower side and 93.40 on higher side with sideways trend.
JPY-INR: Japanese Yen depreciated by 0.71 percent in yesterday’s trading session on the back of strong dollar and rise in risk
appetite in the domestic markets. Demand for dollar went up after strong economic data from US. Further, investors remained
cautious ahead of FOMC meeting minutes and BOJ monetary policy meet. In intraday Yen touched a low of 120.447 and closed at
120.321 against Dollar.
Outlook: Yen is expected to trade negative amid strong dollar globally coupled with rise in risk appetite in the global markets.
Further, weak economic data from Japan may add downside pressure. Investors will keep an eye on BOJ meet outcome. BOJ is
expected to keep its monetary policy unchanged. However, sharp fall in Yen may be prevented as conflicts in the Middle East may
lead to the rise in demand for safe haven. JPYINR April expected to trade in a range between 51.7 on lower side and 52.45 on
higher side with downward trend.
Global economic data
Data
Country
Date
Monetary Policy Statement
Japan
04/08/2015
Tentative
-
-
German Factory Orders m/m
Europe
04/08/2015
11:30am
1.5%
-3.9%
BOJ Press Conference
Japan
04/08/2015
Tentative
-
-
High
UK
04/08/2015
2:00pm
-
-
Medium
Europe
04/08/2015
2:30pm
-0.1%
1.1%
Medium
FOMC Member Dudley Speaks
US
04/08/2015
7:00pm
-
-
Medium
Crude Oil Inventories
US
04/08/2015
8:00pm
-
4.8M
Medium
FOMC Meeting Minutes
US
04/08/2015
11:30pm
-
-
BOE Credit Conditions Survey
Retail Sales m/m
Sharekhan
Time
2
April 08, 2015
Expected
Previous
Impact
High
Medium
High