Currency Insight

Safe-haven yen gains in cautious mood ahead of Fed

The safe-haven yen gained on Tuesday, hitting a seven-week high against the euro, as investors turned risk-averse before the start of a two-day meeting of the U.S. Federal Reserve.

Markets are pricing in only around a 7 percent chance of a U.S. rate hike this week, but they will be watching Fed Chair Janet Yellen closely for any clues to whether “lift-off” could come at its next meeting in December.

The yen had fallen last week, hitting a two-month low against the dollar after the European Central Bank said it was ready to loosen policy further and China cut interest rates again, fuelling speculation that the Bank of Japan could signal more easing at its meeting on Friday.

Euro sags as euro zone inflation turns negative in Sept

The euro lost ground on Wednesday as data showing euro zone inflation dipped back into negative territory in September fuelled expectations the European Central Bank will expand or extend its asset purchase programme.

The euro fell 0.4 percent to $1.1205, and was down 0.7 percent against the British pound, although it remained on track for a quarterly gain against the dollar.

“A weak number was expected and bolsters expectations that the ECB may have to expand its asset purchase programme from the 60-billion-euros-a-month to something larger, perhaps by year-end,” said Richard Falkenhall, currency strategist at SEB.

“That is negative for the euro, but a lot depends on how stock markets behave. If stocks drop, then the euro is likely to be supported as they are going in opposite ways.”.

Sterling trades above $1.52, but lags euro on soft UK data

Sterling rose 0.4 percent against a struggling dollar on Tuesday, as investors fretted about when the U.S. Federal Reserve will raise interest rates amid growing doubts over a global recovery.

The International Monetary Fund (IMF) cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and said policies aimed at increasing demand were needed.

Important events and their explanation:


Time ( IST) Currency Economic Data Actual Expectation Previous
5:20am JPY Retail Sales y/y 0.40% 0.80%
6:00pm USD Goods Trade Balance -64.9B -67.2B
8:00pm USD Crude Oil Inventories 8.0M
11:30pm USD FOMC Statement
USD Federal Funds Rate <0.25% <0.25%


Explanation:-  All eyes are on the FOMC statement as there would be no change in the rate decision. But the important thing is Fed’s indication towards the  December 2015 meeting. China’s weak economy may hinder rate hike. Any dovish statement by the Fed would be negative for the dollar and positive for commodities.

Quick Glance :
Instrument Price %Chg Volume OI
USD/INR 64.98 0.17 788526 960103
EUR/INR 71.89 -0.82 37048 48836
GBP/INR 99.63 0.07 21059 41217
JPY/INR 0.5398 -0.64 7908 15311


Technical touch :




USDINR pair ended on a flat notes under 65.00 levels after a lackluster trade. As said previously, pucialair is trading at its crucial rising trendline resistance. Hence we advice to go long on dips near 64.80 levels till 65.34-80 targets.


Currency Insight

Dollar dips after rally but renewed risk appetite curbs fall

The dollar edged down from a 2-1/2-month high versus a basket of major currencies on Monday, although an increase in risk appetite in the wake of a new round of monetary easing from China limited the greenback’s losses.

Global stock markets rallied after China on Friday cut rates for the fifth time this year, just a day after the European Central Bank signalled that it was ready to increase the scale of its stimulus measures.

The benchmark 10-year U.S. Treasury note yield rose nearly 6 basis points on Friday to a 2-week high as demand for safe havens waned, providing broad support for the dollar, whose index hit 97.201, the strongest since Aug. 12.

Euro hits two-month low vs dollar as ECB weighs

The euro on Friday continued its downward trend against the dollar following European Central Bank chief Mario Draghi’s comments a day earlier that signaled further monetary easing could be on dec for the euro zone.

Europe’s common currency checked in below $1.10, hitting a low against the dollar not seen since early August, and was down 3.05 percent versus the greenback for the week. It was the euro’s worst weekly fall since May.

Pound falls to 2-week lows vs. stronger dollar

The pound fell to two-week lows against the U.S. dollar on Tuesday, as expectations for a U.S. rate hike in the coming months continued to lend broad support to the greenback.

GBP/USD hit 1.5385 during European morning trade, the pair’s lowest since May 8; the pair subsequently consolidated at 1.5415, sliding 0.36%. Cable was likely to find support at 1.5241, the low of May 8 and resistance at 1.5591, the high of May 20. The dollar was boosted after Federal Reserve Chair Janet Yellen reiterated Friday that the bank still expects to start raising interest rates later in the year if the economy continues to improve as expected.

Important events and their explanation:
Time ( IST) Currency Economic Data Actual Expectation Previous
2:30pm EUR M3 Money Supply y/y 5.00% 4.80%
3:00pm GBP Prelim GDP q/q 0.60% 0.70%
6:00pm USD Core Durable Goods Orders m/m 0.00% -0.20%
USD Durable Goods Orders m/m -1.10% -2.30%
7:30pm USD CB Consumer Confidence 102.5 103


Explanation :- Out of the above mentioned data Consumer confidence is the most important data which may impact the USD mostly. We assume data might come negative which would be negative for USD.

Quick Glance :
Instrument Price %Chg Volume OI
USD/INR 64.92 0.17 788526 960103
EUR/INR 71.52 -0.82 37048 48836
GBP/INR 99.51 0.07 21059 41217
JPY/INR 53.64 -0.64 7908 15311


Technical touch :



Pair touched its crucial trendline support and formed an Hammer at daily pattern. We assume a bounce till 65.24 levels with a strong support at 64.70 levels.