6
500,00,000.00
714285.7143
Long term (3 to 6 Months)
“
”
From CEO's Desk
Medium term (Upto 3 Months) Intraday
Note: The above outlook is based on IFA Global Research Academy Proprietary ("IFA Dollar - Rupee Sentiment Index") based on various
techno-fundamental factors relevant to the particular outlook horizon. The index weights have been arrived at after rigorous back testing.
The factors which are considered for computation of barometers includes pre-defined and back tested weightage given to fundamental
factors such as economic data, FII flows, Global equity markets, Government & RBI activity, Onshore-offshore activity, other peer currency
performance and other macro economic factors. Further, this module also considers factors such as major MPC member's speech,
meeting or summit. On the technical front, factors include indicators and oscillators such as RSI, stochastic, combination of moving
averages and other basic & advance technical studies. (0 - 20%=extremely bearish, 21% - 40%=bearish, 41% - 60%=neutral, 61% -
80%=bullish, 81% - 100% extremely bullish)
News On The Street
38% 76% 75%
Mr. Abhishek Goenka
FOMC Policy statement was along expected lines. It acknowledged recent
improvement in economic activity and financial conditions but said considerable risks
to economic outlook remain over the medium term. Chairman Powell too in his speech
reinforced the notion of rates remaining lower for longer by saying the "Committee
members were not even thinking about thinking of tightening policy!".
Accommodative policy is likely to continue till the Fed is reasonably confident that
down side risks to the economy have diminished. US nominal yields are a tad lower
and real rates even lower post the policy. The Dollar continues to trade weak against
majors (EUR, GBP, JPY, AUD, CAD and CHF). Equities and commodities continue to
remain buoyed. US Q2 GDP data is due today (exp -34.5% QoQ). US weekly jobless
claims also due. Rupee is likely to open around 74.80 and continue to trade the 74.60-
75.00 range. Nationalized banks continue to remain firmly on bid, likely on behalf of
the central bank to prevent the Rupee from appreciating in relative terms. REER has
fallen from 114 to 112.4 in about 3 weeks, indicating Rupee overvaluation in relative
terms has got corrected by 1.6 percentage points. Asian currencies except IDR are
trading with a positive bias.
Strategy: Exporters have been advised to cover at lower levels only through option
strategy. Importers are advised to hold maintaining a stop loss of 75.00 or cover
through risk reversals options. The 3M range for USDINR is 73.60 - 75.90 and the 6M
range is 73.00 – 77.00.
IFA Dollar- Rupee Sentiment Index
● US WTI oil price rally on biggest crude inventory draw since 2019
IFA GLOBAL TREASURY RESEARCH ACADEMY| www.ifaglobal.net |
● India's 2020 gold demand to hit 26-year low as prices rally
● Italy extends coronavirus state of emergency to October 15 to check spread
Federal Reserve reiterates
Dovish stance
● Asian stocks rise, dollar languishes near two-year lows post Fed
● Iran fires missiles in drill, prompting alerts at U.S. bases
“USDINR
$ INDEX
EURUSD
GBPUSD
USDJPY
AUDUSD
GOLD
”
Discussion over
proposed US
stimulus package
and macro data to
set the theme for the
short term.
$1450- $1800 ↑
107.00-112.00 106.00-111.00
1.1800-1.2200 ↑
73.60-76.50 ↑
1.2600-1.3200 ↑
0.6800-0.7300 ↑
73.00-76.00 ↑
$1750- $2000 ↑
73.00-77.00 ↑
92.50- 96.50 ↓
1.1600-1.2000 ↑
July 30, 2020
Q4 FY 2020-21
● EURUSD (RANGE- 1.1740 - 1.1830)
GBPUSD is trading near five month high around 1.3000 psychological
mark primarily on the back of USD weakness. USD has been under
pressure amid concerns over its nations handling of the COVID-19
crisis, upcoming election risks and the trade war with China. It seems
that the greenback only strengthens when there is a threat to the risk
markets. The pair needs to break above 1.3000 mark to continue to
North.
● GBPUSD (RANGE- 1.2950 - 1.3040)
IFA Outlook
Q1 FY 2021-22
FX Outlook for the day
● USDINR (RANGE- 74.60 - 75.00)
USDJPY pair eases back to 105.00, mainly driven by fresh US dollar
selling across the board, as the dovish Fed outcome continues to
pressure the US real yields. US nominal yields are a tad lower and real
rates even lower post the policy. Federal Reserve expressed concerns
regarding the health of the US labor market. The DXY could fall further
if the US Q2 GDP prints below estimates, validating Fed dovish stance.
USDINR opened on a flat note at 74.83. Nationalized banks continue to
buy US Dollars aggressively on dips, likely on behalf of the central bank
to prevent the Rupee from appreciating in relative terms. The Dollar has
been weakening against majors but the overall Asian and EM basket
has not appreciated to the same extent against the USD. Narrowing of
onshore-offshore spreads and low vols are positive factors for Rupee.
The EURUSD jumped over 1.1800 level yesterday, hitting the highest
levels since September 2018 post FOMC meeting. The pair is up by
0.7% from yesterday's low and the spot is trading at 1.1780. German
Q2 GDP, inflation prelim inflation figures for July and Eurozone
unemployment numbers are due today. However, euro's recent rally is
reflective of the market's positive outlook for the third quarter.
● USDJPY (RANGE- 104.60 - 105.40)
Q2 FY 2020-21
DAILY CURRENCY INSIGHT
1.2000-1.2400 ↑
Q3 FY 2020-21
0.6800- 0.7500
92.00- 97.00
1.2800-1.3400 1.3000-1.3600 ↑
0.6800- 0.7400 ↑
95.00- 100.00 ↓ 95.00- 100.00 ↓
$1550- $1850 ↑
1.2000-1.2400 ↑
1.3000-1.3600 ↑
73.00 - 77.00 ↑
0.6450- 0.7100
IFA GLOBAL TREASURY RESEARCH ACADEMY| www.ifaglobal.net |
104.50-109.00 ↓
$1700- $2000 ↑
105.00-109.00 ↓
“
”
“
”
“
”
Highest OI for Call is
at 76.00 and .for Put
stands at 74.00 &
75.00. Highest OI
intraday build up is
seen at 75.00 for
both Call and Put
Chart of the Day USDINR Spot: 74.85
● USDINR Open Interest (August expiry )
DAILY CURRENCY INSIGHT
The USDINR pair continues to remain in the 74.50 -
75.00 band in over two weeks. Daily middle bollinger
level as well as falling trendline resistance level at 75.00
to act as strong resistance zone. On the flipside,
intraday support stands at 74.50. Either side breakout of
74.50 - 75.00 range to guide further direction.
FIIs have so far
withdrawn $13.53
billion in the
calendar year 2020
Activity Kurtosis
IFA GLOBAL TREASURY RESEARCH ACADEMY| www.ifaglobal.net |
● FII activity against USDINR and Nifty
July 30, 2020
LIBOR ON 1M 6M 1Y MONTH 1M 3M 1Y 2Y
USD 0.08 0.16 0.32 0.46 USDINR 0.22 0.69 2.90 6.26
EUR -0.58 -0.50 -0.43 -0.32 EURINR 0.31 0.99 4.14 8.91
JPY 0.04 -0.07 -0.03 0.10 GBPINR 0.30 0.94 3.93 8.49
JPYINR 0.23 0.74 3.18 6.92
REGION LAST % CHANGE LAST CHANGE % CHANGE
ASIA 25144 1.05 1954.00 0.08 0.05
3298 0.09 24.30 -0.02 -0.13
22373 -0.11 44.08 -0.01 -0.02
INDIA 38310 0.63 93.38 -0.08 -0.08
11276 0.65 103.50 -0.04 -0.04
EUROPE 4959 0.60
12822 -0.10 FY 2020-21 CY 2020 29-Jul-20
6131 0.04 35,949 -12,081 183
US 26540 0.61 -31,373 -93,968 -556
10543 1.35 2,511 4,862 8
7,087 -1,01,187 -365
“ Pivot S2 S1 P R1 R2
USDINR 74.25 74.50 74.77 75.02 75.29
EURINR 84.55 85.84 86.52 87.81 88.49
GBPINR 94.90 95.27 95.51 95.88 96.12
JPYINR 68.94 69.70 70.23 70.99 71.52
”
Currency Time (IST) Actual Forecast Previous Impact
29-Jul AUD 7:00 AM -1.90% -2% 0.3% Bullish
USD 6:00 PM -70.64B - -75.26B Bullish
USD 7:30 PM 16.60% 15% 44.3% Bullish
USD 11:30 PM 0.25% 0.25% 0.25% Neutral
30-Jul EUR 1:30 PM -9.00% -2.20%
USD 6:00 PM -34.10% -5%
USD 6:00 PM 1450K 1416K
DAILY CURRENCY INSIGHT July 30, 2020
IFA GLOBAL TREASURY RESEARCH ACADEMY| www.ifaglobal.net |
Major Global Events
Macro Monitor
TOTAL
EQUITY
CPI (QoQ) (Q2)
Pending Home Sales (MoM) (Jun)
DEBT
German GDP (QoQ) (Q2)
GDP (QoQ) (Q2)
Initial Jobless Claims
FTSE
Goods Trade Balance (Jun)
Pivot Points
HYBRID
USDINR is likely to find resistance at R1
(75.02)
DOW
NASDAQ
Fed Interest Rate Decision
Figures are in INR Crores
Dollar INDEX
Rolling Forward Premiums (in paise)
CAC
DAX
Major Global Rates
LIBOR Rates
COMMODITIES/DIGLOBAL INDICES
Quick Glance
FPI INFLOWS
Bloomberg ADXY
GOLD ($/ounce)
Brent ($/brl)
SILVER ($/ounce)
HANG SENG
SHANGHAI
NIKKEI
SENSEX
NIFTY
IMPORTANT NOTICE AND DISCLAIMER
While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and IFA Global can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein. This document does not constitute a recommendation to sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investments. Although every investment involves some degree of risk, the risk of loss trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. IFA Global makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments.
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Research & Analytics Desk: +91 8879390076 | Treasury Audit & Bank Negotiation Desk: +91 8879630572 |
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