USDINR opened at 82.75 y’day and the pair traded in the 82.55-82.81 range. Spot USDINR closed at 82.55, loss of 26 ps for USD as against prior close of 82.81.

RBI reference rate was fixed at 82.63 on 05/01. Jan USD/INR closed at 82.56, loss of 36 ps for USD as compared to prior day’s close of 82.92. Jan Euro/INR closed at 87.68, GBP/INR at 99.27 and Yen/INR at 62.54. USDINR fwd premia was trading at around 1.95% p.a.  FX reserves stands at USD 562 bn as on Dec 30 th.  FX reserves has declined 72 bn y/y and around 44.5 bn from March 2022.

In Dec, FII’S have bought Rs 2206 Cr of Equities till date and have sold Rs 3228 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty declined 50 points (0.28%) y’day. DOW declined 339 points (1.02%) y’day. Nikkei climbed 0.40%  and Hang Seng climbed 1.25% y’day.

Euro is now at 1.0528, Pound at 1.1923, Yen at 133.64.

Commodities: Gold is now at USD 1838 and WT1Crude at USD 74/Brent at USD 79.

Interest rates: USD 10 Yr yield is at 3.72% and 3 m libor closed at 4.77%. Indian 10 yr benchmark yield closed at 7.32%.

Economic news: Rising yields and Fed’s hawkish minutes triggered further slump in Equities. Strong ADP employment report and fall in weekly jobless claims weighed down on sentiment. This comes ahead of today’s US employment report. Dec employment report could show additional 2 lac jobs addition in Dec with unemployment rate at 3.7%. Federal Reserve Bank of St. Louis President James Bullard said that while inflation is too high, the rates are getting closer to a “sufficiently restrictive zone.” 

US NFP data release on Friday is the next important data release.

Data highlights: – US Weekly jobless claims declined to 204k and ADP employment data showed that private sector added 235 k jobs.

-EU PPI declined -0.9% m/m.

Friday’s calendar : US employment data, ISM(non mfrg) and factory orders

-EU CPI

-German retail sales and factory orders

 Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 50, 200 day major moving averages.20 day moving average is at 82.73. 50 day moving average is at 82.23.200 day moving average is at 79.54. Daily MACD is in sell zone. Important support is at 82.40 and important resistance is at 82.92. Spot closed below its average level of the day.

Intraday supports and resistances for Jan contract are:

PP: 82.66, S1:82.42, S2:82.28, R1:82.80, R2:83.04.             

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

However on directional basis, suggest the following:

Exports be hedged on rally to 82.90+.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50 and 200 day major moving averages. Major resistance is at 1.0735/1.08/1.0945. Next major support is at 1.0575. Daily MACD is in buy zone, implying an important bottom at 1.0575. Weekly MACD is in buy zone, implying important bottom at 0.9535.

GBP/USD: The pair is above 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 1.2445 and weekly MACD is in buy zone, implying important bottom at 1.0380. Important support is at 1.1750/1.1650. Important resistance is at 1.2350/1.2450/1.2750.

USD/YEN: The pair is below 20, 50 and 100 day moving averages. Daily MACD is in sell zone, implying important top at 134.50. Important support is at 130.50/129.50/126.50. Major resistance is at 134.50/138.50.

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