November 9, 2018

Daily Currency outlook

• PRODUCT 1

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Monthly Currency and
Thematic reports

Currency Action
Recommendation in the report
Currency pair Contract Action Price Target Stoploss Duration US$INR Sell
US$INR November futures Sell 72.74 72.40 72.90 1-2 days
• PRODUCT 2
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Research Analysts
Amit Gupta
amit.gup@icicisecurities.com

Gaurav Shah
Gaurav.shah@icicisecurities.com
Forex and global equities
Spot Currency • The rupee posted some recovery on Tuesday ahead of Diwali
Currency Close Pvs. Close % Change holidays. It is expected to open on a further higher note taking cues

CURRENCY OUTLOOK
US$INR 73.00 73.13 -0.17 from overseas markets
Dollar index 96.72 96.00 0.76
• The US$ recovered sharply yesterday as the Fed remains on course
EUR-US$ 1.1363 1.1426 -0.55
to raise interest rates for a fourth time in December. Euro was
GBP-US$ 1.3062 1.3126 -0.49
weighed as the ECB warned Italy that it may breach ECB’s fiscal
US$-JPY 114.07 113.52 0.48
deficit limits. However, we see limited gains for the dollar from
AUD-US$ 0.7256 0.7276 -0.27
present levels on recent developments in the US domestic political
US$-CHF 1.0059 1.0023 0.36
equation. Also, Euro continues to hover near the supports of 1.13
levels. Any positive economic data could see Euro rising sharply

ICICI Securities – Retail Equity Research

Global Equity Indices
• Equity benchmark indices edged higher as the Nifty settled at
Indices Close Pvs. Close % Change
10530, up 68 points or 0.65%
Dow Jones 26191 26180 0.04
Nasdaq 7159 7203 -0.62 • Broader markets relatively outperformed benchmarks as the Nifty
FTSE 7141 7117 0.33 midcap, small cap rose almost 1%, each
DAX 11527 11579 -0.45
HangSang 25750 26228 -1.82
Nikkei 22297 22487 -0.85
SGX Nifty 10598 10616 -0.17

*Asian equity indices at 8.00 am

Source: Bloomberg, ICICI Direct Research
 Debt and FII activity

Benchmark yield • Government bonds rose in the previous session supported by

Close Pvs. Close % Change positive moves in the rupee as well as sharp selling in crude oil
India 10-yr 7.80 7.81 -0.12
• US treasury yields were unchanged while overall debt remains
US 10-yr 3.24 3.24 0.06
under pressure as the Fed remains on course to raise interest rates
Eur 10-yr 0.46 0.45 2.24 for a fourth time in December 2018
UK 10-yr 1.57 1.53 2.09
JPY 10-yr 0.12 0.12 -0.81

Commodities • Gold was lower on Thursday weighed down by a recovery in the

Close Pvs. Close % Change US$ as well as yields. However, it is expected to find support amid a
Gold 1224 1226 -0.20 hit to risk sentiment

ICICI Securities – Retail Equity Research

Copper 273.6 275.5 -0.67 • Crude oil declined almost 1.97% as investors booked profit amid
Brent 70.7 72.1 -1.97 relief to some countries to keep importing oil from albeit at curtailed
levels. In the near term, supply from the US and Saudi Arabia is
expected to remain in focus

FII Activity
• Foreign institutional investors (FII) were net buyers to the tune of
Segment Purchase Sell Net | crores
| 421 crore on November 5, 2018
Equity 4511 4429 82
Debt 532 193 339 • FIIs have been net buyers of the more than | 6001 crore in
November 2018

Source: Bloomberg, ICICI Direct Research, CDSL

INR futures and Outlook

Currency futures on NSE

chng (%) • The dollar-rupee November contract on the NSE was
Contracts LTP chng (%) OI Vol at 72.61 in the previous session. November contract
OI Vol
November 72.62 -0.87 2002377 236055 2.45 -88.34 open interest increased 2.45% in the previous session
December 72.88 -0.85 339021 21847 0.22 -79.60 •• cWe expect the US$INR to find meet supply pressure at
Nov-Dec -0.26 - - 214208 - 90.74 higher levels. Utilise upsides in the pair to initiate short
Dec-Jan -0.23 - - 14397 - 65.90 positions

Pivot levels US$INR Strategy

ICICI Securities – Retail Equity Research

Futures Pivot S1 S2 R1 R2 US$INR November futures contract (NSE)
US$INR (Nov) 72.63 72.55 72.49 72.69 72.77 Sell US$ in the range of 72.70 -72.78 Market Lot: US$1000
US$INR (Dec) 72.97 72.73 72.59 73.11 73.35 Target: 72.45 / 72.35 Stop Loss: 72.90
EURINR (Nov) 83.52 83.43 83.35 83.60 83.70 Support Resistance
EURINR (Dec) 84.03 83.97 83.89 84.11 84.18 S1/ S2: 72.60 / 72.45 R1/R2:72.75 /72.95
GBPINR (Nov) 95.54 95.40 95.21 95.73 95.87 *Recommendation initiation message shall be broadcasted on iclick2gain at relevant prices
GBPINR (Dec) 96.06 95.96 95.87 96.14 96.24
JPYINR (Nov) 64.24 64.16 64.07 64.33 64.41
JPYINR (Dec) 64.72 64.57 64.48 64.80 64.95

Source: Bloomberg, ICICI Direct Research

US$INR Spot currency

US$INR Spot

ICICI Securities – Retail Equity Research

Strategy Update
Date Currency pair Strategy Rec. Target SL (P/L)* Comment
6-Nov-18 US$INR Sell future 73.14 72.98 73.26 60 Exit in profit

Source: Bloomberg, ICICI Direct Research

Open Recommendations

Date Currency Product Strategy Recommendation price Target Stoploss Time frame
10/25/2018 US$INR Positional Currency Sell US$INR November future 73.47 72.20 74.50 1 month

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ICICI Securities – Retail Equity Research

Source: Bloomberg, ICICI Direct Research
Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

ICICI Securities – Retail Equity Research

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ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No 7, MIDC,

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Mumbai – 400 093

research@icicidirect.com
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