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MARKET HEADLINES

 Rupee down 12 paise against dollar in early trade

Continuing its fall for the fifth straight day, the rupee lost another 12 paise to trade at a fresh 10-month low of 62.45 against the US dollar in early trade today at the Interbank Foreign Exchange due to sustained demand for the American unit from importers. The rupee had plummeted to a 10-month low of 62.33 against the greenback, down 31 paise in yesterday’s trade, on strong dollar demand due to oil firms stepping up purchases of crude oil which is trading near 5-year lows. Meanwhile, the BSE benchmark Sensex recovered by 64.20 points, or 0.23 per cent, to 27,766.21 in early trade today.

 China’s yuan dips as traders brace for data, further stimulus moves

China’s yuan weakened slightly against the dollar on Friday after the central bank set the official guidance rate lower, and as traders looked to a raft of economic data later in the day for clues on further stimulus measures. The spot market opened at 6.1937 per dollar, down 0.08 per cent from the previous close and was changing hands at 6.1915 at midday. The spot rate slid 0.59 per cent in Monday and Tuesday trading before stabilising amid trader suspicions that the central bank had intervened. The PBOC set the midpoint rate at 6.1184 per dollar prior to the market open, down 0.05 per cent from the previous fix. The spot rate is currently allowed to trade 2 per cent above or below the midpoint. The spot rate was 1.19 per cent below the midpoint, the largest spread since late June.

DAILY CURRENCY UPDATE

Dollar little changed vs. rivals in holiday-thinned trade
The dollar was little changed against a basket of other major currencies on Monday, as trading volumes were expected to remain thin with U.S. markets closed for the Columbus Day holiday.

The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, held steady at 85.73.

The dollar struggled to regain traction after the minutes of the U.S. Federal Reserve’s September meeting last week prompted investors to push back the expected timing of a Fed rate hike.

On Friday, Fed Vice Chairman Stanley Fischer said weaker-than-expected global growth could prompt it to slow the pace of eventual interest rate hikes.

USD/JPY edged down 0.09% to trade at 107.54 as market sentiment was hit by global growth concerns after the International Monetary Fund cut its forecasts for global growth in 2014 and 2015 and warned that global growth may never reach its pre-crisis levels ever again.

Markets in Japan were to remain closed for a national holiday.

EUR/USD rose 0.38% to 1.2973. Sentiment on the euro remained vulnerable amid fears that Germany, the euro zone’s largest economy is being dragged into a recession after recent data indicated unexpected weakness in manufacturing and exports.

GBP/USD edges higher in quiet trade
The pound edged higher against the U.S. dollar in quiet trade on Monday, with U.S. markets to remain closed for Columbus Day and although global growth concerns persisted.

GBP/USD hit 1.6126 during European morning trade, the session high; the pair subsequently consolidated at 1.6089, adding 0.09%.

Cable was likely to find support at 1.6006, Friday’s low and resistance at 1.6227, the high of October 9.

Market sentiment was hit last week after the International Monetary Fund cut its forecasts for global growth in 2014 and 2015 and warned that global growth may never reach its pre-crisis levels ever again.

Meanwhile, the dollar struggled to regain traction after the minutes of the U.S. Federal Reserve’s September meeting prompted investors to push back the expected timing of a Fed rate hike.

On Friday, Fed Vice Chairman Stanley Fischer said weaker-than-expected global growth could prompt it to slow the pace of eventual interest rate hikes.

Elsewhere, sterling was lower against the euro, with EUR/GBP rising 0.29% to 0.7880.

Sentiment on the euro remained vulnerable amid fears that Germany, the euro zone’s largest economy is being dragged into a recession after recent data indicated unexpected weakness in manufacturing and exports.

MARKET HEADLINES

  Rupee down 15 paise against dollar in early trade
The rupee fell by 15 paise to 61.20 against the dollar in early trade today due to fresh demand for the US currency from banks and importers amid a weak opening in local equities. Dealers said besides increased demand for the American currency from importers, the dollar’s strength against other Asian currencies overseas, put pressure on the local unit. The rupee had gained 35 paise to close at over one-week high of 61.05 against the dollar yesterday on persistent selling of the US currency by exporters and some banks amid a surge in local equities. Meanwhile, the benchmark BSE Sensex fell by 256.81 points, or 0.96 per cent, to 26,380.47 in early trade today.

China’s yuan slips ahead of likely weak data
China’s yuan slipped on Friday as investors consolidated gains in a holiday- shortened week ahead of a raft of data next week which will provide clues on the extent of the slowdown in the economy. Softer domestic demand probably pulled down growth in China’s imports, investment and retail sales to multi-month or multi-year lows in September, raising questions about whether policymakers should do more to stimulate activity. “We expect below-consensus readings for all of these indicators, which would re-ignite growth concerns and exert some downward pressure on the yuan,” said Dariusz Kowalczyk, a strategist at Credit Agricole in a daily note. A weak midpoint fixing by China’s central bank also prompted some traders to take profits after recent gains on concerns about waning global growth. The People’s Bank of China set the midpoint rate at 6.1470 per dollar prior to market open, slightly weaker than the previous fix. The spot rate is currently allowed to trade 2 per cent above or below the midpoint. The spot market opened at 6.1300 per dollar, slightly stronger than Thursday’s close but weakened to 6.1333 in late morning trades. Concerns about weak Chinese data also weighed on the offshore yuan market where the currency weakened after posting strong gains this week. As a result, the gap between the offshore and the onshore yuan narrowed substantially to below 80 pips from a high of nearly 400 pips seen at end September when pro-democracy protests intensified in Hong Kong. A Reuters poll released on Thursday showed sentiment toward the yuan in the last two weeks remained bullish as the People’s Bank of China was generally setting official guidance rates at stronger levels. Still, long positions in the currency declined to their smallest since mid-July.

MARKET HEADLINES

 Rupee ends day at 61.05 versus US dollar
The rupee closed the day at 61.09 against the US greenback, after gaining 50 paise to 60.90 per dollar in intraday trade. This was on the back of persistent selling of the American unit by banks and exporters amid bearish dollar overseas and rallying domestic equities.The rupee had resumed higher at 61.13 per dollar as against yesterday’s closing level of 61.40 at the Interbank Foreign Exchange ( Forex). In the New York market, the US dollar languished at a two-week low against its major rivals in early trade, having fallen for a third straight session minutes after the US Federal Reserve’s last policy meeting which prompted markets to push out the likely timing of an interest rate rise.

 Russia central bank makes 17.66 billion roubles worth of forex interventions on October 7
Russia’s central bank said on Thursday that it had conducted 17.66 billion roubles ($440 million) worth of forex interventions to defend the rouble on October 7. The central bank releases its interventions data with a two-day lag.The rouble has been sliding on falling oil prices and broad risk aversion towards Russia because of its role in the Ukraine crisis.

 Rupee sees biggest single-day gain in nearly 2 months
The rupee posted its biggest single-day gain in nearly two months on Thursday, after hitting the highest level in more than two weeks after the U.S. Federal Reserve’s September policy meeting minutes suggested it was in no hurry to raise interest rates. The dollar fell to a three-week low against the yen, as investors cut favourable bets after minutes of the Federal Reserve’s last meeting prompted many to push out expectations for the likely timing of an interest rate rise. The index of the dollar against six major currencies was down 0.22 per cent with most Asian currencies also rallying against the greenback. “The dollar took quite a beating and we saw domestic equities rally, both together helped the rupee gain,” said Naveen Raghuvanshi, a foreign exchange dealer with DCB Bank. “We could see the pair touch 60.80 going by technicals but there is good state-run bank buying around 61 levels. Broadly the near-term range is likely to be 60.80 to 61.40/45,” he added. Traders are now awaiting retail and wholesale inflation data and factory output data due to be released next week for domestic cues. The partially convertible rupee closed at 61.04/05 per dollar compared with 61.3950/4050 on Thursday. The rupee touched 60.9025 earlier, its strongest level since Sept. 23. The rupee gained for a fourth straight day, rising 0.6 per cent, its biggest single-day gain since Aug. 14. Gains in the domestic share market also helped with good dollar selling seen by custodian banks.

MARKET HEADLINES

 Rupee down 5 paise against dollar in early trade
The rupee weakened by five paise to 61.48 against the dollar in early trade today at the Interbank Foreign Exchange due to increased demand for the US currency from importers. Forex dealers attributed the rupee’s fall to increased demand for the US currency from importers and a lower opening in the domestic equity market.Besides, the dollar’s strength against other units overseas put pressure on
the rupee, they said. The rupee yesterday appreciated by 18 paise to close at 61.43 against the Greenback on sustained selling of the US currency by banks and exporters. Meanwhile, the benchmark BSE Sensex fell by 84.16 points, or 0.32 per cent, to 26,187.81 in early trade today.

 Will rupee see free fall as US dollar strengthens?
The Indian rupee, along with other global currencies, is depreciating due to steadily firming US dollar on the back of improvement in the US economy. The Indian unit, which appreciated at 58.30 in the month of May due to strong dollar inflows, is on a decline. It weakened by five paise to 61.48 against the dollar in trade today. With expectation of interest rate hike in the US, the USD/INR is anticipated to remain in the bullish trend. According to analysts at Standard Chartered, movement in the US Dollar index is far sharper than the rupee
movement and is leading to its weakness. Build-up of long dollar and short rupee positions are seen. Hence some more downside is expected in the near to medium term. Most forex analysts are of the view that INR has a strong support near the 63 level. The USD/INRpair is seen respecting a downside trendline from the past two years, diligently making it to be a very strong support line for the pair. “The pair breached its upside trendline recently at 61 levels (September 2014). This marks a breakout (black colour circle in the chart) in triangular pattern; indicating a further upside for the pair,” said Abhishek Goenka (Founder & CEO, India Forex Advisors. “Going ahead, the upside trendline will now become the support line for the pair. Looking at the overbought condition in the stochastics, we might foresee some gains in the Indian rupee. In the coming 6 months, the Indian rupee is expected to target 63 plus levels,” Goenka added. “The cluster of bearish candles that formed between 62.00 and 63.00 during October 2013 and February 2014 is now acting as a supply line,” said Anindya Banerjee, Currency Derivatives Research Desk, Kotak Securities. According to him, dips are expected to be well supported by the annual price average ribbon, which are located between 59.80 and 60.60 and they are right now rising at the rate of 20/25 paise every month.

MARKET HEADLINES

 Rupee down 25 paise against dollar in early trade
The rupee depreciated by 25 paise to 61.40 against the US dollar in early trade todayat the Interbank Foreign Exchange due to month-end demand for the US currencyfrom importers amid a weak opening in the domestic equity market. Forex dealerssaid besides the dollar’s gains against other currencies overseas after US datashowed the economy expanded at its fastest pace since 2011 during the April-June
quarter, fresh demand from importers for the American unit put pressure on the rupee. The rupee had recovered by 19 paise to close at 61.15 against the dollar in Friday’s trade in tune with local equities. Meanwhile, the benchmark BSE Sensex fell by 82.11 points, or 0.31 per cent, to 26,544.21 in early trade today.

 South Korean won falls nearly 1% against the dollar; shares edge lower
The South Korean won fell nearly 1 per cent on Monday to its lowest close since April 7, as the dollar resumed its broad rally on robust US data and reached a four- year high against a basket of major currencies. The won was quoted at 1,053.8 to the dollar at the conclusion of onshore trade compared to Friday’s close of 1,044.4, breaching a key psychological resistance level of 1,050. South Korean shares edged lower on Monday, as a tepid industrial profit report over the weekend continued a string of lacklustre data from China, South Korea’s largest export destination. The Korea Composite Stock Price Index (KOSPI) edged 0.25 per cent lower to close at 2,026.60 points. Decliners were led by growth-related counters sensitive to Chinese demands. Steel giant POSCO tumbled 4.5 per cent and DaewooBSE 0.00 % Shipbuilding & Marine Engineering slid 4.3 per cent.

DAILY CURRENCY UPDATE

Dollar steady, near 4-year peak ahead of U.S. data
The dollar held steady, close four-year highs against a basket of other major currencies on Friday, as investors awaited the release of U.S. economic reports later in the day and expectations for an early U.S. rate hike continued to support.

Demand for the dollar remained supported by mounting expectations that the Federal Reserve could raise interest rates sooner than expected.

On Thursday, Dallas Federal Reserve President Richard Fisher said that the U.S. central bank may start raising interest rates around the spring of 2015.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was steady at 85.34, not far from Thursday’s high of 85.61, the highest level since July 2010.

USD/JPY edged up 0.23%, hovering close to a six-year peak at 108.99.

Earlier Friday, data showed that Japan’s consumer price inflation rose at an annualized rate of 3.3% this month, below expectations for a 3.4% increase.

Core consumer price inflation, which excludes fresh food, rose 3.1% in September from a year earlier, compared to expectations for an increase of 3.2%.

The euro held steady near two-year lows against the dollar, with EUR/USD at 1.2749 after data earlier showed that the Gfk German consumer climate index ticked down to 8.3 this month, from a reading of 8.6 in August. Analysts had expected the index to slip to 8.5.

GBP/USD almost unchanged, focus on U.S. GDP
The pound was almost unchanged against the U.S. dollar on Friday, as investors remained cautious ahead of the release of U.S. second quarter economic growth data later in the day.

GBP/USD hit 1.6286 during European morning trade, the session low; the pair subsequently consolidated at 1.6315, easing 0.01%.

Cable was likely to find support at 1.6244, the low of September 18 and resistance at 1.6416, the high of September 24.

Demand for the dollar remained supported by mounting expectations for an early U.S. rate hike.

Dallas Federal Reserve President Richard Fisher signalled on Thursday that the U.S. central bank may start raising interest rates around the spring of 2015.

The pound had strengthened earlier in the week as investor focus returned to the outlook for U.K. monetary policy in the wake of last week’s Scottish independence referendum.

Sterling was steady against the euro, still hovering near two-year highs with EUR/GBP at 0.7811.

The euro remained under pressure after data earlier showed that the Gfk German consumer climate index ticked down to 8.3 this month, from a reading of 8.6 in August. Analysts had expected the index to slip to 8.5.

MARKET HEADLINES

 Dollar marches to four-year high; euro, oil wilt
The dollar hit a four-year high and oil hovered near a two-year low on Thursday, as investors wagered the United States will be one of the few economies healthy enough to wean itself off of central bank aid in the near future. Share markets in Europe started with small gains as Britain and France debated joining US-led military action against Islamist militants and as the euro sank to a 22-month low on
bets the ECB will need a major stimulus effort. Its President Mario Draghi reiterated in a newspaper interview again on Thursday there was more the ECB can do if necessary. His words came as the central bank released its latest batch of lending data that, like it has for months, showed there is little in the way of demand for credit in the euro zone’s still-struggling economy. “ECB President Mario Draghi
continues to beat the QE ( quantitative easing) drums … so hardly surprising that euro/dollar is trading at even lower levels this morning,” said Esther Reichelt, a currency strategist at Commerzbank,” Britain’s FTSE, Germany’s DAX and France’s CAX rose 0.1-0.3 per cent toput the region in the black after a choppy few days, but it was the currency market where most of action was.

 Euro falls to 22-month low vs dollar on diverging rate outlooks
The euro hit a 22-month low against the dollar on Thursday on the prospect of diverging monetary policy between the Federal Reserve and the European Central Bank as rate differentials swing decisively in the greenback’s favour. The common currency fell to $1.2730 on trading platform EBS, its lowest since November 2012, and was down 0.3 per cent on the day. The dollar index hit a new four-year high.
The latest drop came as yield differentials between US 10-year Treasuries and their German counterparts traded near 15-year highs, driving more investors to buy the dollar. A recent batch of economic data has also highlighted the diverging economic outlook for the euro zone and the United States. While German business sentiment fell again in September to its lowest level in nearly 1-1/2 years, sales of new U.S. single-family homes surged in August to their highest level in more than six years. ECB President Mario Draghi kept alive expectations of more policy steps in the euro zone, including the possible use of sovereign bond purchases, also known as quantitative easing (QE), to revive the region’s stalled economy. Draghi told the Lithuanian business daily Verslo Zinios the ECB was ready to use additional unconventional instruments or change the size of current asset purchase programmes if it became necessary to address risks of very low inflation.

MARKET HEADLINES

 Rupee edges up against dollar as Asian forex pare gains
Rupee was trading at 60.8375/8450 against dollar versus Friday’s close of 60.81/82.

Regional currencies pare gained on caution ahead of China’s preliminary PMI survey due on Tuesday. Concerns about China’s
economy weighed on emerging currencies last week.

Traders said that dollar sales from custodian banks were being offset by greenback purchases by state-owned banks.

 Dollar sits back after record-breaking run higher
Major currencies recovered some ground against the dollar on Monday after the dollar index racked up a 10th straight week of gains,
its longest winning streak since its free float in 1973.

Stock and currency markets were taking a breather after one of the most volatile and event-filled weeks in more than a year, but there is
plenty of data and policymaker comment spread through this week for investors to get their teeth into.

Top of the agenda for the euro is European Central Bank President Mario Draghi’s appearance in the European parliament, which follows
a lukewarm take-up for the bank’s latest scheme to push more money through the financial system.

If purchasing managers surveys on Tuesday point to more weakness in the euro zone.

DAILY CURRENCY UPDATE

Bitcoin trades near 5-month low as regulation concerns weigh
Bitcoin prices traded near the lowest level since April on Monday, amid concerns about possible regulation of the virtual currency.

Bitcoin (BTC/USD) tacked on $4.23, or 1.06%, on Slovenia-based BitStamp to trade at $404.23 during U.S. morning hours. BitStamp prices fell to $379.50 on September 19, a level not seen since early April.

Bitcoin prices were likely to find support at $379.50, the low from September 19, and resistance at $452.99, the high from September 18.

The price of a bitcoin on Bulgaria-based BTC-e added $5.50, or 1.43%, to trade at $388.71, while prices on Singapore-based itBit advanced $2.08, or 0.52%, to trade at $402.18.

According to the CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, prices of the crypto-currency inched up 1.04% to trade at $400.68.

Market players remain concerned about possible regulation of the virtual currency among other adverse events in the industry.

New York’s Department of Financial Services proposed a BitLicense on July 17. As per the proposal, firms would have to obtain a license to engage in the virtual currency business.

Some market analysts have expressed concerns over the proposal, saying increased regulation would pressurize the Bitcoin industry.

Meanwhile, euro-denominated Bitcoin prices (BTC/EUR) rose €3.59, or 1.15%, to trade at €316.00 on U.S.-based Kraken Exchange.

EUR/USD off 14-month lows but remains under pressure
The euro edged up against the U.S. dollar on Monday, easing off a 14-month low but gains were expected to be capped as growing expectations for an early U.S. rate hike continued to support the greenback.

EUR/USD hit 1.2868 during European morning trade, the session high; the pair subsequently consolidated at 1.2855, adding 0.19%.

The pair was likely to find support at 1.2826, the low of September 19 and resistance at 1.2929, the high of September 19.

The dollar remained supported as signs that the economic recovery is making solid progress fuelled expectations that the Fed will hike interest rates sooner than markets are expecting.

Last week, the Fed offered fresh guidance on its plans to raise interest rates, outlining in more detail how it will start to raise short term interest rates when the time comes.

The euro has remained under broad selling pressure since the European Central Bank unexpectedly cut rates to record lows across the euro zone earlier this month, and implemented fresh measures in an attempt to shore up inflation in the currency bloc.