FX – MORNING UPDATE                                               

USDINR opened at 81.06 on Friday and the pair traded in the 80.78-81.24 range. Spot USDINR closed at 80.99, gain of 26 ps for USD as against prior close of 80.73.

RBI reference rate was fixed at 80.91 on 23/09. Sep USD/INR closed at 81.12, gain of 19 ps for USD as compared to prior day’s close of 80.93. Sep Euro/INR closed at 79.23, GBP/INR at 89.71 and Yen/INR at 56.84. USDINR fwd premia was trading at around 2.70% p.a.  FX reserves stands at USD 545 bn as on Sep 16 th. FX reserves further declined by USD 5 bn, compared to prior week.


In Sep till date FII’S have net bought Rs 4378 Cr of Equities in Cash segment and have bought Rs 5912 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.47 lac Cr worth of Equities. In 2021-22, FII’S net sold Rs 128897 cr in Equity segment and have net bought Rs 4805 cr of debt. In 2020-21 financial Year, FII’S nett bought Rs 2,74,203 Cr of Equities and have sold Rs  42820 Cr in debt.

Benchmark Nifty declined 302 points (-1.72%). DOW declined 486 points (-1.62%). Nikkei declined 0.58% and Hang Seng declined 1.18%.

Euro closed the week at 0.9690, Pound at 1.0858, Yen at 143.34.

Commodities: Gold is now at USD 1651 and WT1Crude at USD 79.45/Brent at USD 86.65.

Interest rates: USD 10 Yr yield is at 3.68% and 3 m libor closed at 3.48%. Indian 10 yr benchmark yield closed at 7.39%.

Economic news: Rupee declined to 81.24 and clawed back to 80.78 on RBI intervention. RBI has already spent USD 105 bn in maintaining Rupee level below 80. FX reserves has declined to USD 545 bn. With USD climbing steeply against majors on Friday, Rupee’s decline will continue. RBI may smoothen the fall with sporadic intervention.

Sterling nose dived as UK’S mini budget left investors worried over Govt’s ability to manage ballooning deficit. Despite BOE’S rate hike moves, Sterling weakened as economic prospects dimmed further. Recession, along with inflation could entrench in UK economy.

Dollar index climb accelerated and hit 113.20. Crude declined 5% as Global demand is likely to decline.

RBI’S meeting on Friday could see rate hike by 40 bps.

Data highlights: – US PMI(mfrg) was reported at 49.8 and PMI(services) climbed to 51.8.

-EU PMI(mfrg) was reported at 48.5 and PMI(services) was reported at 48.9.

-UK PMI(mfrg) was reported at 48.5 and PMI(services) was reported at 49.2.

Monday’s calendar : No major data release.

USD/INR   81.2480.78
EUR/USD       0.96900.98520.9668
GBP/USD       1.08581.12731.0840
USD/JPY       143.34143.46141.77

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD0.97360.9805 0.9920  0.96200.9552 
GBP/USD1.09901.1140 1.1423  1.07071.0557 
USD/JPY142.85143.94 144.54  142.24140.96 
USD/INR8181.2281.46 80.7680.54 


Currency PairSupportsResistancesTrendRemarks

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 79.81. 50 day moving average is at 79.71.200 day moving average is at 77.10. Daily MACD is in buy zone. Important supports are at 80.78/80.60 and important resistance is at 81.25/81.60. Spot closed above its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 81.07, S1:80.86, S2:80.60, R1:81.33, R2:81.54.             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

USDINR imports be hedged at 80.78/80.60.


EURO/USD: The pair is below major moving averages. Major resistance is at 0.9860/1.02. Next major support is at 0.96. Daily MACD is in sell zone, implying an important top at 1.02. Weekly MACD is in sell zone, implying important top at 1.1498.

GBP/USD: The pair is below 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 1.1740 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.07. Important resistance is at 1.14.

USD/YEN: The pair is above 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 145. Important support is at 140.50/137.50. Major resistance is at 145.

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