Rupee Report
July 6, 2009
Market Recap: Spot USDINR slipped after a firm opening Friday. Sentiment weakened for USDINR on expectations that FII investments could improve after the budget presentation. At the start of the session, USDINR firmed as the local equity markets fell nearly 1%. But post the railway budget presentation, which if not pathbreaking was largely seen favorable by the market participants, the equity markets rebounded. The favorable view of railway budget sparked renewed buying interest on expectations that the union budget could go one step ahead and usher many steps seen aiding fiscal consolidation. Also hopes that government could step up efforts to lighten their stake in many public sector units as well as list, the unlisted ones, and which in turn could spark another round of FII inflows, put pressure on USDINR. As USDINR breached the 48.10 support, there were large orders for dollar sales from some oil, engineering and petrochemical companies near 48.05 level. Spot USDINR ended under 48 level at 47.89 from 47.95 Thursday. Domestic equity indices rebounded after falling nearly 1% initial to close with a gain of 2%. Fund buying and short covering ahead of the Union budget presentation on Monday, supported the rally. Among the gainers were companies from power, steel, banks and metals. In overseas market, US markets remained closed for a holiday. Meanwhile the debate over US dollar's future continues to be questioned with many countries actively joining the debate. India and Russia have said that the world economy was over reliant on USD and called for changes ahead of the G8 meet. India's economic adviser to the Prime Minister, Suresh Tendulkar, has been advising Singh to diversify India’s $264.6 billion in foreign-exchange reserves and hold fewer dollars, according a report in Bloomberg. Tendulkar said that big dollar holders face a “prisoner’s dilemma,” a reference to a problem in game theory in which a rational choice for an individual has negative consequences for a group. France to seems to have joined the debate. Finance Minister Christine Lagarde and Bank of France Governor Christian Noyer called for increased global coordination of currencies. French finance minister Christine Lagarde and Bank of France Governor Christian Noyer called for increased global coordination of currencies. Market Outlook: Spot USDINR could remain under pressure ahead of union budget presentation. There are expectations that the government could announce definite plan for divestment from public sector units. If so, it spark another wave of FII inflows and this will keep sentiment weaker for USDINR. Another factor which will add pressure on USDINR is the inflows lined up from funds raised by Indian companies through QIPs. It is being speculated that around 400 billion rupees could be raised through QIPs. On Friday, we had suggested buying 1-month dollar/rupee futures for a target of 48.30-40, with a stop at 47.80. Our target was missed by 3 paise. We suggest closing this trade. We suggest selling 1-month dollar/rupee futures contract with a stop at 48.30 for targets of 47.30 and 47.50.
INR Onshore-Forward Curve 49.90 49.50 49.10 48.70 48.30 47.90 47.50 Spot One Month Three Month Six Month One Year
3-Jul
Per USD
4-Jul
NSE Contract Expiry Date 29-Jul-09 27-Aug-09 28-Sep-09 28-Oct-09 26-Nov-09 26-Nov-09 29-Dec-09 27-Jan-10 24-Feb-10 29-Mar-10 24-Apr-10 Total MCX-SX Contract Expiry Date 29-Jul-09 27-Aug-09 28-Sep-09 28-Oct-09 26-Nov-09 29-Dec-09 Total BSE Contract Expiry Date 29-Jul-09 Total India Interbank
Open 48.14 48.29 48.42 48.5 48.6 48.395 48.65 0 0 0 0
High 48.27 48.40 48.45 48.50 48.60 49.00 48.65 0.00 0.00 0.00 0.00
Low 47.96 48.07 48.16 48.29 48.33 48.40 48.65 0.00 0.00 0.00 0.00
Close 48.01 48.12 48.25 48.33 48.33 48.52 48.65 0.00 0.00 0.00 0.00
Prv close Volume (lots) Open Interest 48.07 662,262 285,567 48.18 13,273 50,777 48.22 1,782 5,568 48.36 411 2,134 48.48 117 4,004 48.59 48.70 48.72 48.83 48.93 49.02 252 100 0 0 0 0 678,197 1,492 626 445 158 261 243 351,032
Open 48.1 48.3 48.44 48.4 0 0
High 48.27 48.38 48.45 48.40 0.00 0.00
Low 47.96 48.06 48.17 48.39 0.00 0.00
Close 48.01 48.10 48.18 48.39 48.49 48.59
Prv Close Volume (lots) Open Interest 48.07 574,064 232,826 48.17 48.28 48.39 48.49 48.59 11,400 273 434 0 0 586,171 59,853 1,888 1,905 1,026 485 296,472
Open -
High -
Low -
Close 48.16
Prv Close Volume (lots) Open Interest 48.28 0 0 _____ Six month _____ Close Prev 48.52 48.57 2.63 2.59 48.54 48.72 12.895 12.655 ___YEN___ 3/7/2009 2/7/2009 49.96 49.47 Key International Interest Rates Current Prev U.S. 0-0.25 0-0.25 E.U. 1.00 1.00 U.K 0.50 0.50 Japan 0.10 0.10 (2,487) 84.10 0.49 In Million for Apr 2009 In USD Million on July 2 In USD Billion in May 2009 _____ One year _____ Close Prev 49.01 49.08 2.34 2.36 49.07 49.25 12.95 12.795
Rupee/USD Forward Premia/Dis Rupee/USD (NDF) Rupee Option Implied Vol (%) RBI Reference Rate USDINR Stats Low since 1997 High since 1997 2009 High 2009 Low India Statistics GDP Inflation (WPI) IIP Forex Reserves Other Markets Equity Markets BSE NSE Nikkei 225 FT-SE 100 Nasdaq Dow Jones
_____ Spot-rates _____ Close Prev 47.89 47.95
_____ One month _____ Close Prev 48.01 48.07 3.01 3.00 47.95 48.17 12.2325 12.37 ___GBP___ 3/7/2009 2/7/2009 78.81 78.58 Key Currencies Close 1.3980 1.6333 96.040 1.0866 Prev 1.4004 1.6394 95.940 1.0844
____ Three month ____ Close Prev 48.22 48.28 2.76 2.75 48.18 48.40 12.895 12.655 ___EURO___ 3/7/2009 2/7/2009 67.25 67.47
___USD___ 3/7/2009 2/7/2009 47.99 47.79
51.97 35.70 51.97 46.94 5.8 -1.30 1.40 263.6
Euro Pound Yen Swiss-Fr
Key India Interest Rates Current Prev Call rate 3.25 3.25 MIBIR 3.25 3.30 RBI Repo 4.75 5.00 Rev Repo 3.25 3.50 RBI USD purchase/sale FII Net Equity Investments Ext Com Borrowings/FCCB
% growth in GDP Jan-Mar 09 % chg yoy for the week ended Jun 20 %change m/m for Apr 2009 In US $ billion as of June 19
Close 14,913.1 4,424.3 9,816.1 4,236.3 1,796.5 8,280.7
Change 254.56 75.40 (60.08) 2.01 (49.20) (223.32)
________________ Bullion ________________ Bullion Close Change Gold $/Oz 932.3 2.45 Silver $/Oz 13.4 0.00 MCX-Gold 10gm 14,452.0 (32.00) MCX-Silver 1Kg 21,334.0 (60.00)
__________ Energy __________ $/barrel Close Change NYMEX-WTI 66.7 (2.58) Brent 66.7 (2.14)
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