USDINR opened at 81.79 y’day and the pair traded in the 81.71-81.89 range. Spot USDINR closed at 81.77, gain of 22 ps for USD as against prior close of 81.55.

RBI reference rate was fixed at 81.77 on 17/01. Jan USD/INR closed at 81.82, gain of 19 ps for USD as compared to prior day’s close of 81.63. Jan Euro/INR closed at 88.54, GBP/INR at 100.05 and Yen/INR at 63.61. USDINR fwd premia was trading at around 2.14% p.a.  FX reserves stands at USD 562 bn as on Jan 6 th.  

In Jan, FII’S have sold Rs 2312 Cr of Equities till date and have sold Rs 1348 Cr of debt till date. In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty climbed 133 points (0.74%) y’day. DOW declined 391 points (1.14%) y’day. Nikkei climbed 1.08%  and Hang Seng declined 0.05% y’day.

Euro is now at 1.0790, Pound at 1.2280, Yen at 128.85.

Commodities: Gold is now at USD 1910 and WT1Crude at USD 81/Brent at USD 86.50.

Interest rates: USD 10 Yr yield is at 3.55% and 3 m libor closed at 4.81%. Indian 10 yr benchmark yield closed at 7.29%.

Economic news: Indian exports declined 12.2% in Dec to USD 34.5 bn. Imports also declined 3.5% to USD 58.2 bn. Trade deficit declined to USD 23.7 bn. India’s Current account deficit (CAD) widened to $36.4 billion, an all-time-high level in absolute terms, and 4.4 per cent of GDP, in the September quarter owing mainly to a record deficit of $83.5 billion.

ECB Chief Economist Philip Lane said in an FT interview published today, “we’re not yet at the level of interest rates needed to bring inflation back to 2 per cent in a timely manner”, and “it still requires work”.

China’s GDP growth slowed to 2.9% yoy in Q4, down from Q3’s 3.9% yoy

Data highlights: – EU Zew survey jumped to 16.7.

-UK unemployment rate was reported at 3.7%.

Wednesday’s calendar : – US PPI, retail sales and industrial production.

-UK CPI, PPI and PRI

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 20 and 50 day averages, but still above 100, 200 day major moving averages.20 day moving average is at 82.40. 50 day moving average is at 82.11.200 day moving average is at 79.63. Daily MACD is in sell zone. Important support is at 81.27 and important resistance is at 81.82/81.95/82.05. Spot closed below its average level of the day.

Intraday supports and resistances for Jan contract are:

PP: 81.83, S1:81.73, S2:81.63, R1:81.92, R2:82.03.             

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 82.60/82.75+.

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 1.0480/1.0420. Daily MACD is in sell zone, implying an important top at 1.0740. 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 1.1840. Important resistance is at 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 129.50/126.50. Major resistance is at 134.50/138.50.

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