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21 Apr 2014
Asia EM Express: China to boost investment in clean energy to stimulate growth
FXStreet (Łódź) - On Friday China's Premier Li Keqiang announced plans of more investments in renewable energy, such as the construction of hydroelectric, solar and wind power plants as well as nuclear electricity stations in eastern coastal regions. He also mentioned the promotion of electric vehicles and working on solutions for long-distance power transmission.
These innovations should “help stabilize the economy, change the structure of energy consumption, and change the growth model," Li Keqiang declared.
Zhiwei Zhang, Research Analyst from Nomura believes that the project announced by Premier Li is “another stimulus measure to help the economy,” so most probably investment in these areas should “pick up in Q2 and H2.”
“To increase the pace of investment, monetary policy will have to be loosened. We continue to expect the People's Bank of China to cut reserve requirement ratio by 50bp in Q2 and another 50bp
in Q3. We also expect credit growth as measured by total social financing to pick up in
Q2,” the analyst added.
Economic data
India's FX Reserves increased to $309.44B from $306.65B the Reserve Bank of India reported on Friday. Bank Loan Growth slowed down to 13.8% in March from 14.3% in February.
Technicals
The Indian Rupee fell by 0.15% to 60.37 against the greenback on Monday on renewed dollar demand from banks and importers.
On Friday the USD/INR daily FXStreet Trend Index was slightly bullish, with the OB/OS Index neutral. RSI sat at 43 at the last close, and has climbed to 57 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 2058 pips, with ATR (14) at 2823 pips. The 1D 200 SMA was at 61.9225, while the 1D 20 EMA was at 60.3615.
Chintan Karnani, Director of Insignia Consultants believes that in April 2014 USD/INR's “failure to break 60.80 this week will result in a fall to 59.96 and 59.36.”
The EUR/INR on the other hand “needs to break 84.30 this week else it will fall to 82.52 and 81.70. Jobbers watch 83.29,” he adds.
These innovations should “help stabilize the economy, change the structure of energy consumption, and change the growth model," Li Keqiang declared.
Zhiwei Zhang, Research Analyst from Nomura believes that the project announced by Premier Li is “another stimulus measure to help the economy,” so most probably investment in these areas should “pick up in Q2 and H2.”
“To increase the pace of investment, monetary policy will have to be loosened. We continue to expect the People's Bank of China to cut reserve requirement ratio by 50bp in Q2 and another 50bp
in Q3. We also expect credit growth as measured by total social financing to pick up in
Q2,” the analyst added.
Economic data
India's FX Reserves increased to $309.44B from $306.65B the Reserve Bank of India reported on Friday. Bank Loan Growth slowed down to 13.8% in March from 14.3% in February.
Technicals
The Indian Rupee fell by 0.15% to 60.37 against the greenback on Monday on renewed dollar demand from banks and importers.
On Friday the USD/INR daily FXStreet Trend Index was slightly bullish, with the OB/OS Index neutral. RSI sat at 43 at the last close, and has climbed to 57 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 2058 pips, with ATR (14) at 2823 pips. The 1D 200 SMA was at 61.9225, while the 1D 20 EMA was at 60.3615.
Chintan Karnani, Director of Insignia Consultants believes that in April 2014 USD/INR's “failure to break 60.80 this week will result in a fall to 59.96 and 59.36.”
The EUR/INR on the other hand “needs to break 84.30 this week else it will fall to 82.52 and 81.70. Jobbers watch 83.29,” he adds.