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
40% 76% 75%
Mr. Abhishek Goenka
Risk sentiment remained supported on Senate Democrat leader's constructive
comments on the stimulus package. The S&P 500 is now just about 2% shy of its all
time closing high and the NASDAQ closed at a new record high yet again. The US
yields are lower with 10y yield threatening to break 0.5% for the first time since March.
We typically associate risk on with higher yields. However, the correlations are
working differently this time. Preemptive loosening of monetary policy by the US Fed
has pushed US real yields to record lows. The US Dollar is being treated as a funding
currency in a risk on scenario. It is expensive to the hold the US Dollar and therefore
we are seeing the US Dollar sell off on every uptick, especially against majors. USDINR
is likely to trade in 74.90-75.20 range intraday. Most Asian currencies are 0.3-0.5%
stronger against the USD. US ISM non manufacturing PMI, EIA crude inventory data
and US July ADP private payroll data is due today. USDCNH has broken through 6.96
for the first time since March. US and China are to review their trade deal on 15th
August.
Strategy: Exporters were advised to cover partial long term exposure at 75.15 level.
Importers are advised to cover through risk reversal option strategy. The 3M range for
USDINR is 73.60 – 75.90 and the 6M range is 73.00 – 77.00.
IFA Dollar- Rupee Sentiment Index
● U.K. plans $1.7 Billion in building projects to boost the economy
IFA GLOBAL TREASURY RESEARCH ACADEMY| www.ifaglobal.net |
● Banks sanction Rs 1.38 trn loans to MSMEs under credit guarantee scheme
● Gold rise above $2,000 for first time in history as U.S. dollar and bond yields recede
USDINR opens lower tracking
global dollar weakness
● U.S., China plan to review Phase one trade deal on August 15
● Google owner Alphabet issues record $10 billion bond at lowest-ever price
“USDINR
$ INDEX
EURUSD
GBPUSD
USDJPY
AUDUSD
GOLD
”
73.60-76.50 ↑
1.2600-1.3200 ↑
0.6800-0.7300 ↑
73.00-76.00 ↑
$1750- $2000 ↑
73.00-77.00 ↑
$1450- $1800 ↑
107.00-112.00 106.00-111.00
1.1800-1.2200 ↑
92.50- 96.50 ↓
1.1600-1.2000 ↑
$1700- $2000 ↑
105.00-109.00 ↓
August 5, 2020
Q4 FY 2020-21
● EURUSD (RANGE- 1.1770 - 1.1850)
Yesterday, the GBPUSD pair reached a low at 1.2980 but recovered
from the mentioned low to settle around 1.3060. The decline and the
later recovery were once again tracking the dollar movement, as
market continues to ignore UK Brexit concerns. UK PM Johnson
announced another round of stimulus of around $1.7 billion focused in
home construction and infrastructure, aimed to boost the economy.
● GBPUSD (RANGE- 1.3040 - 1.3140)
IFA Outlook
Q1 FY 2021-22
FX Outlook for the day
● USDINR (RANGE- 74.90 - 75.20)
The USDJPY pair came under heavy pressure during the early American
session amid plunging US Treasury bond yields and ignoring the rally in
the US stocks. 5-year US Treasury bond yield plunged to an all-time low
at 0.19% while the 10y yield is threatening to break 0.5% for the first
time since March. Meanwhile, BOJ is considering extending a March
2021 deadline for lending facilities.
USDINR opened lower today by 12 paise at 74.93 tracking broad dollar
weakness and strengthening Asian currencies. USDCNH has broken
through 6.96 for the first time since March. US and China are to review
their trade deal on 15th August. Most Asian currencies are 0.3-0.5%
stronger against the USD. This coupled with strong buying in equities
likely to ease pressure on the Rupee
EURUSD pair is finding support near 1.1700 from last couple of
sessions, currently trading above 1.1800 level. Further gains target the
peak from last Friday above 1.1900. Fed’s dovish tone combined with
Eurozone's encouraging rebound prospects from the pandemic and
the ongoing positive reappraisal of EUR’s long-term prospects following
Europe’s fiscal burden sharing accord has been supporting the Euro.
● USDJPY (RANGE- 105.00 - 106.00)
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 |
104.50-108.50 ↓
RBI Policy, discussion
over proposed US
stimulus package
and macro data to
set the theme for the
short term..
“
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“
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● FII activity against USDINR and Nifty
August 5, 2020
● USDINR Open Interest (August expiry )
DAILY CURRENCY INSIGHT
Highest OI for both
Call and Put stands at
75.00. Highest OI
intraday build up is
seen at 73.50 Put
and unwinding at
75.00 Call
IFA GLOBAL TREASURY RESEARCH ACADEMY| www.ifaglobal.net |
Chart of the Day USDINR Spot: 74.90
The USDINR pair opened lower below 75.00 level.
Currently, it is hovering around daily middle bollinger
band level at 74.90. The pair is back into the three week
consolidation range of 74.50 - 75.00. The intraday view
for the pair remains neutral to bearish.
FIIs have so far
withdrawn $12.59
billion in the
calendar year 2020
Activity Kurtosis
LIBOR ON 1M 6M 1Y MONTH 1M 3M 1Y 2Y
USD 0.09 0.15 0.31 0.45 USDINR 0.22 0.67 2.91 6.60
EUR -0.58 -0.52 -0.43 -0.33 EURINR 0.32 0.96 4.14 9.27
JPY 0.04 -0.07 -0.03 0.10 GBPINR 0.30 0.91 3.95 8.94
JPYINR 0.23 0.71 3.15 7.15
REGION LAST % CHANGE LAST CHANGE % CHANGE
ASIA 25083 0.55 2018.00 9.00 0.48
3381 0.29 25.95 -0.08 -0.30
22540 -0.15 44.38 -0.05 -0.11
INDIA 38049 0.96 93.13 -0.26 -0.28
11199 0.94 103.93 0.20 0.19
EUROPE 4889 0.28
12601 -0.36 FY 2020-21 CY 2020 4-Aug-20
6036 0.05 43,688 -4,341 7,524
US 26828 0.62 -32,408 -95,004 -264
10941 0.35 2,511 4,862 -1
13,791 -94,483 7,259
“ Pivot S2 S1 P R1 R2
USDINR 74.54 74.73 74.85 75.04 75.16
EURINR 85.98 87.11 88.13 89.26 90.28
GBPINR 94.30 96.16 97.42 99.28 100.54
JPYINR 69.59 70.18 71.02 71.61 72.45
”
Currency Time (IST) Actual Forecast Previous Impact
4-Aug AUD 10:00 AM 0.25% 0.25% 0.25% Neutral
USD 7:30 PM 6.20% 5.00% 8.00% Bullish
5-Aug CNY 7:15 AM 54.1 - 58.4 Bearish
INR 10:30 AM 34.2 38.8 33.7 Bearish
EUR 1:30 PM 55.1 55.1
USD 0.74 1500K 2369K
USD 7:30 PM 55.0 57.1
IFA GLOBAL TREASURY RESEARCH ACADEMY| www.ifaglobal.net |
Major Global Events
Macro Monitor
TOTAL
EQUITY
RBA Interest Rate Decision (Aug)
DEBT
Services PMI (Jul)
ADP Nonfarm Employment Change (Jul)
ISM Non-Manufacturing PMI (Jul)
FTSE
Nikkei Services PMI (Jul)
Factory Orders (MoM) (Jun)
Pivot Points
HYBRID
EURINR is likely to find immediate
resistance at R1 (89.26)
DOW
NASDAQ
Caixin Services PMI (Jul)
DAILY CURRENCY INSIGHT
Figures are in INR Crores
Dollar INDEX
Rolling Forward Premiums (in paise)
CAC
DAX
Major Global Rates
LIBOR Rates
COMMODITIES/DIGLOBAL INDICES
Quick Glance
FPI INFLOWS
Bloomberg ADXY
GOLD ($/ounce)
Brent ($/brl)
SILVER ($/ounce)
HANG SENG
SHANGHAI
NIKKEI
SENSEX
NIFTY
August 5, 2020
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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