Thursday, 30 October 2014

Usdinr Desk Tips - 31.Oct.2014

USDINR ( 26-Nov-14 ) Enters in to Buy Zone and it is showing Strength. It is expected to test Resistance levels 61.87 / 61.97 / 62.06 . And the lower side , it has Strong Support @ 61.78 downside, it may tank to near support Levels such as 61.69 / 61.60 / 61.50 . Currently USDINR is Trading @ 61.78

 

EURINR ( 26-Nov-14 ) Enters in to Sell Zone and it is showing weakness. It is expected to test near Support levels 77.47 / 77.22 / 76.86 . And the upperside, it has Strong Resistance @ 77.83 upperside, it may test Resistance Levels such as 78.08 / 78.44 / 78.70 . Currently EURINR is Trading @ 77.72

 

GBPINR ( 26-Nov-14 ) Enters in to Buy Zone and it is showing Strength. It is expected to test Resistance levels 99.09 / 99.37 / 99.64 . And the lower side , it has Strong Support @ 98.82 downside, it may tank to near support Levels such as 98.55 / 98.28 / 98.00 . Currently GBPINR is Trading @ 98.82

 

JPYINR ( 26-Nov-14 ) Enters in to Sell Zone and it is showing weakness. It is expected to test near Support levels 56.56 / 56.43 / 56.29 . And the upperside, it has Strong Resistance @ 56.70 upperside, it may test Resistance Levels such as 56.83 / 56.97 / 57.10 . Currently JPYINR is Trading @ 56.69

 

What are the benefits of trading in Currency Derivatives

Currency Derivatives are very efficient risk management instruments and you can derive the below benefits:


i. Hedging: You can protect your foreign exchange exposure in business and hedge potential losses by taking appropriate positions in the same. For e.g. If you are an importer, and have USD payments to make at a future date, you can hedge your foreign exchange exposure by buying USDINR and fixing your pay out rate today. You would hedge if you were of the view that USDINR was going to depreciate. Similarly it would give hedging opportunities to Exporters to hedge thier future receivables, Borrowers to hedge foreign currency (FCY) loans for interest and principal payments, Resident Indians, who can hedge their offshore investments.

ii. Speculation: You can speculate on the short term movement of the markets by using Currency Futures. For e.g. If you expect oil prices to rise and impact India's import bill, you would buy USDINR in expectation that the INR would depreciate. Alternatively if you believed that strong exports from the IT sector, combined with strong FII flows will translate to INR appreciation you would sell USDINR.

iii. Arbitrage: You can make profits by taking advantage of the exchange rates of the currency in different markets and different exchanges.

iv. Leverage: You can trade in the currency derivatives by just paying a % value called the margin amount instead of the full traded value.

 

 

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