USDINR opened at 71.77 on Friday and the pair traded in the 71.38-71.81 range. Spot USDINR closed at 71.40 y’day, loss of 1 ps for USD as against prior close of 71.78. RBI reference rate was fixed at 71.99 on Thursday. Sep USD/INR closed at 71.63, loss of 37 ps for USD as compared to prior day’s close of 72. Sep Euro/INR closed at 79.27, GBP/INR at 87.30 and Yen/INR at 67.46.
FII’S have nett sold Rs 16126 Cr of Indian Equities in Aug . FII’S have nett bought Rs 49373 Cr of Indian Equities in this calendar Year till date. FII’S have pulled out Rs 29000 Cr of Indian Equities since budget day. FII’S have nett bought Rs 10821 Cr of Indian debt securities in Aug FII’S have nett bought Rs 29603 Cr of Indian debt in this calendar year till date.
Benchmark Nifty climbed 0.68% on Friday. DOW climbed 41 points(0.16%) on Friday. Nikkei climbed 1.19% and Hang seng climbed 0.08% on Friday.
Euro closed the week at 1.0991 ,Pound at 1.2165,Yen at 106.29.
Commodities: Gold is now at USD 1520 and WT1Crude at USD 55.16/Brent at USD 59.10.
Interest rates: USD 10 Yr yield is at 1.506% and 3 m libor closed at 2.15%. Indian 10 yr benchmark yield closed at 6.56%.
Economic news: Indian Q1 GDP growth declined to 5%, lowest in 6 Years. This is against 5.8% in Q4 2018-19 and 8% in Q1 of last fiscal. Mfrg growth declined to 0.6% and agri sector grew by 2% as against 5.1% in Q1 of last year.Electricity generation was the only bright spot as it grew by 8.6% in Q1.Construction grew by 5.7%, mining grew by 2.7%. Net external trade contributed positevely to the GDP, as exports went up 5.7 percent (vs 10.6 percent in Q1) and imports increased at a softer 4.2 percent (vs 13.3 percent in Q1
Household spending climbed only 3.1% , down from 10.6% in March quarter. Investments grew by 4% from 3.6% in March quarter.
In another step to create bigger banks, Govt announced merger of 10 banks into 4 entities and steps towards better Governance. This will enable banks to absorb shocks, reap scale size and raise capital. Banks will also have separate mechanism for sanctioning and monitoring of big loans. Bank boards will also be empowered.
US spending data continued to remain robust, fending off fears of slow down.
Data highlights : US personal income grew 0.1% m/m, spending climbed 0.6% m/m and Core PCE index climbed 0.2% m/m.
-German retail sales declined -2.2% m/m, EU CPI was reported at 1% y/y and unemployment rate stands at 7.5%.
-Japanese CPI climbed 0.7% y/y, unemployment rate dipped to 2.2% y/y and housing starts declined -4.1% y/y.
Monday/Tuesday calendar: – US ISM (mfrg), construction spending
-EU PMI(mfrg), PPI
-UK PMI(mfrg) and PMI(construction)
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 50 and 200 day moving averages. 20 day moving average is at 71.15. 50 day moving average is at 69.80.200 day moving average is at 70.20. Daily MACD is in sell zone, implying top at 72.25. Important support is at 71.35/70.80 and next important resistance is at 72.25/72.45. Spot closed below its average level of the day.
Intra day supports and resistances for Aug contract are:
PP: 71.74,S1:71.44, S2:71.26, R1:71.92, R2:72.22.
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Next Major resistance is at 1.1250 Major support is at 1.0840. Daily MACD is in sell zone, implying an important top at 1.1250. Weekly MACD is in sell zone, implying important top at 1.1415.
GBP/USD: The pair is bearish and is trading below major moving averages.Daily MACD is in buy zone, implying important bottom at 1.2025 and weekly MACD is in sell zone, implying important top at 1.3385. Important resistance is at 1.2380. Important support is at 1.20.
USD/YEN: The pair is below major moving averages. Daily MACD is in buy zone, implying important bottom at 104.45. Next important resistance is at 107 and later at 109. Important support is at 104.45.