Currency Derivative Weekly Review This week Rupee movement was volatile, in the first half to start the week Rupee continued to appreciate for first two days of the week, it strengthened for straight five days taking cues from good domestic data released this week also the local equities traded positively with the help of FIIs buying which further helped Rupee to trade strong. But towards the end of the week, profit booking was seen in the local equities & also because of the defence buying Rupee depreciated on Thursday to break the consecutive five day gain, but on the weekly basis it managed to close on a positive note for the second consecutive week. The trading range for the spot USDINR pair is expected to be within 62.80 to 64.80. Recommended to be cautious & Buy USDINR Futures on dips with the appropriate stop loss as Rupee is expected to depreciate against dollar. Pivot Point for the Pair is at 64.04 & below is the Support & Resistance levels. To control the CAD issue we need to focus more on export revenue and inward remittances. Last year India imported around $150bn of crude oil in 2012-13, 34% of the total import bill. Although India has some domestic reserves of crude oil, these meet only 20% of its needs. It is highly vulnerable to changes in international prices. A $1 change in crude oil price boosts India’s trade deficit by $900m. India’s oil demand is set to more than double by 2035 and import dependence is likely to increase from 75% to 92%. Currently, India’s largest crude suppliers are Saudi Arabia (19%), Iraq (13%), Venezuela (11%) and Kuwait (10%). Crude oil supports a wide variety of economic activities. There is a strong correlation between India’s private consumption growth and growth in oil imports. But around 30% of India’s imported crude oil is exported as refined petroleum. These products are India’s second largest export after engineering goods, and account for over 18% of total exports, earning $55bn in 2011-12. India has the third largest refining capacity in Asia, after China and Japan. In Gujarat, Reliance Industries has the world’s single largest refining capacity. The government is encouraging further private investment in refineries to increase capacity over 25% by 2017. Global oil markets will remain relatively well supplied, despite the sharply lower production numbers from Libya, Syria and much of the North Sea, as robust supply gains in Saudi Arabia and North America will compensate. For Short-term, geopolitical tensions in Syria will be a concern, but the overall the market fundamentals look reasonably secure. Gold traded weak & lost more than 5 per cent this week, taking cues from concerns about the U.S. monetary-policy outlook. The stronger-than-expected U.S. jobless-claims data out early Thursday had increased the odds the Federal Reserve would begin trimming its monetary stimulus at next week’s meeting, an action that would be considered bearish for gold.
Posted on: Fri, 13 Sep 2013 11:48:41 +0000
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